Skip to content
Subscriber Only

FCC Crushes Dish's Dreams of Becoming a Wireless Carrier, For Now

  • CEO Ergen needs a network to put wireless airwaves to use
  • Last week's setback from regulators means fewer options

Billionaire Charlie Ergen needs to decide what to do with his $50 billion supply of airwaves after U.S. regulators ruled he couldn’t buy some on the cheap, nudging his goal of building a nationwide wireless carrier further out of reach.
Ergen’s plan went like this: amass wireless spectrum at a discounted price, then buy a smaller provider like Sprint Corp. or T-Mobile US Inc. to quickly put all of those airwaves to use.
After being outbid for Sprint in 2013, Ergen was dealt a new blow last week when U.S. regulators rejected a $3.3 billion discount for a recent airwave auction. The decision means Ergen’s Dish Network Corp. must pay $13.3 billion -- instead of $10 billion -- for spectrum that will play a crucial role in creating a wireless network. The extra money could lead to a credit-rating downgrade, leaving Dish with more debt -- and still no network.

By making the plan of building up a competitor to market leaders Verizon Communications Inc. and AT&T Inc. a lot more expensive, the government’s decision put Ergen at a crossroads.
“There’s a lot of attention now on how he ultimately optimizes his spectrum portfolio,” said Amy Yong, an analyst with Macquarie Capital USA Inc.
Here are Ergen’s options: