The FCC may reject US DTH giant Dish Network’s attempt for more than US$3bn in spectrum discounts after its review reportedly turned up a number of issues.
The regulator is still weeks away from a decision but its probe so far suggests the road to…
The FCC may reject US DTH giant Dish Network’s attempt for more than US$3bn in spectrum discounts after its review reportedly turned up a number of issues.
The regulator is still weeks away from a decision but its probe so far suggests the road to approval will be tough, reported the Wall Street Journal citing people familiar with the matter.
Dish bought US$13.3bn worth of AWS-3 spectrum earlier this year through entities that it believed qualified for a 25% discount aimed at small businesses: NorthStar Wireless LLC and SNR Wireless LicenseCo.
The move prompted FCC commissioner Ajit Pai to call on the regulator to “reform its rules to stop abuse of the [designated entity (DE)] programme”.
Dish has insisted it followed the rules, and has pointed to similar DE investment structures used by telcos such as AT&T and Verizon that have been approved in the past.
New Street Research analyst Jonathan Chaplin believes Dish will more likely pay the discount rather than forfeit the licences if the FCC does rule against it.
“If they keep the discounts, our price target would go up by US$4 to US$131 (88% upside),” Chaplin said.
“If they are denied the discounts we assume they will pay the US$3.3bn rather than forfeit the licenses. In this case, our price target would by lowered by US$3 to US$124 (78% upside) because we value the licenses at what a carrier would have paid (the bid immediately before the winning Dish bid), which is lower than what Dish paid.”
Dish’s shares down 0.33% to US$69.68 yesterday.
One of only two primary satellite TV providers in the US, Dish has been busy amassing spectrum from a variety of sources as it looks to acquire or partner with a telco to build a terrestrial LTE network. The group was recently said to be considering a tie-up with T-Mobile after failing in 2013 to buy its larger rival Sprint.
Yesterday, Dish announced an alliance with T-mobile, Sprint, and other telcos, policy and public interest groups to increase access to next year’s auction of 600MHz broadcast TV spectrum.
They have called on the regulator to reserve at least half of the spectrum available in the auction for smaller carriers – rules that could exclude larger telcos AT&T and Verizon in many markets.
The group, called SaveWirelessChoice.com, said: “Creating an adequate reserve of quality spectrum for companies who don’t already own more than 1/3 of the low-band spectrum in any given market will go a long way toward levelling the playing field for a competitive market that will benefit consumers for decades to come.”
