Dish Network Plans to Offer Mobile Broadband Services Using DBSD Assets

Dish Network plans to use DBSD’s technology and spectrum for mobile broadband services, offered “both on a stand-alone basis and in a consumer-friendly bundle with its multichannel video services,” Dish said in a license transfer application at the FCC International Bureau. FCC approval would allow DBSD’s parent company ICO Global to transfer its satellite, several S-band, Ku-band and Ka-band earth stations and S-band mobile satellite service/ancillary terrestrial component blanket license to Dish, the filing said. DBSD controls 20 MHz of S-band spectrum.

Dish is buying the bankrupt S-band licensee for $1.4 billion (CD March 16 p11), including $325 million that will go to ICO. Although a bankruptcy judge has already approved the Dish purchase, DBSD still needs the FCC’s approval and a bankruptcy judge approval of a reorganization plan to emerge from bankruptcy. A hearing on the reorganization is expected by July 18, the filing said. The application is at http://xrl.us/bjnyks.

Dish said it will deploy a hybrid satellite/terrestrial system that will allow access to “a myriad of Internet Protocol-based, over-the-top applications, including mobile video.” Dish declined to comment. The company is looking into the necessary amount of spectrum and availability of devices operable with DBSD spectrum that “will be required to launch viable mobile broadband offerings and support the data rates associated with such offerings,” it said. Dish noted that its subsidiary owns licenses to 6 MHz of 700 MHz spectrum in 170 markets and that sister company EchoStar owns a minority interest in TerreStar, another S-band licensee in bankruptcy. The ability to combine DBSD’s spectrum with other spectrum would add to the “effectiveness and competitiveness of any mobile broadband services,” said Dish.

The license transfer will create a new competitor without harming existing competition, said Dish. DBSD doesn’t provide any service now, and even a combined DBSD/TerreStar wouldn’t eliminate competition, Dish said. If a later transaction resulted in the combined DBSD/TerreStar, the total S-band holdings would only be 40 MHz, less than the FCC’s now-abandoned 45 MHz spectrum cap and less than half of the 95 MHz wireless spectrum screen used by the FCC to determine if a concentration warrants further competitive inquiry, said Dish.

EchoStar’s purchase of Hughes (CD Feb 15 p10) isn’t relevant because Hughes doesn’t provide mobile broadband services. There’s “significant competitive pressure” in all services offered by MSS operators -- voice, low- and high-speed data -- as the FCC previously found when approving Harbinger Capital Partners purchase of SkyTerra that created LightSquared. The transaction will also add competition to the wireless market, said Dish. The deal complies with FCC rules and regulations while enhancing competition and saving a company from bankruptcy, said Dish.

Dish can’t “afford to sit still” while other TV providers offer bundles of services that include two-way broadband, said Dish Executive Vice President of Sales Tom Cullen in a declaration that accompanied the application. DBS only has one-way capabilities and customers “want and need” a broadband component added to the video services offered by Dish, said Cullen. A mobile broadband service “would be another natural complement” to Dish’s service, he said.

The deal for DBSD includes an offer to pay Sprint Nextel $40 million if Sprint agrees to tender its claims seeking broadcast auxiliary service spectrum relocation costs, the application said. Sprint has sought about $100 million from each of the S-band licensees for costs it took on to make the band usable for others. If Sprint doesn’t tender its claims, Dish and DBSD have agreed to pay Sprint the allowed amount of the claims, as decided by the bankruptcy court, Dish said.