FCC chair backs Dish Network as wireless carrier, but with a catch

Julius Genachowski favors Dish's plan to become a wireless provider but wants to impose power limits on the company's network.

The FCC's chairman has given his thumbs-up to Dish Network's desire to enter the wireless market. But Dish is none too happy with the restrictions proposed.

FCC Chairman Julius Genachowski said yesterday he would approve Dish's request to build its own 4G wireless network, the Washington Post reported. The federal agency, which opposed the proposed merger between AT&T and T-Mobile last year, wants to see more competition in the wireless industry.

"If approved, these actions will promote competition, investment, and innovation, and advance commission efforts to unleash spectrum for mobile broadband to help meet skyrocketing consumer demand, while unlocking billions of dollars of value to the public," FCC spokesman Neil Grace said yesterday.

On its end, Dish said it expects to spend billions of dollars to create its broadband network, a move that it claims would yield tens of thousands of jobs.

But the FCC is considering placing limits on the power used by Dish's network in order to prevent interference with other airwaves. And that isn't sitting too well with Dish.

"While the FCC would grant full terrestrial rights, its proposal to lower our power and emissions levels could cripple our ability to enter the business," R. Stanton Dodge, Dish general counsel, said in a statement.

Dish said that the proposal, which is backed by Sprint Nextel, would require it to deactivate 25 percent of its uplink spectrum. It would also hamper another 25 percent of the spectrum to allow for the potential future use by Sprint of neighboring H Block spectrum, which is not currently licensed by the FCC. Wrangling over these issues would further delay the development of its 4G network, argues Dish.

"If the FCC adopts this draft, the 3GPP (Third Generation Partnership Project) specification will likely be reopened and an FCC rulemaking will be needed for the H Block," Dodge said. "Until we know how to manage issues like interference from the H Block, we may have to put on hold activities like radio design and network build out while we wait for the H Block rulemaking and another 3GPP process to be completed."

The proposed restriction comes as no surprise, according to Credit Suisse analysts Stefan Anninger and Ashton Ngwena. In an investors note out today, the two analysts pointed to recent reports that suggested Dish might need to limit its uplink spectrum in order to "save" the neighboring H Block.

The two also downplayed the proposal, arguing that most of Dish's spectrum is associated with its downlink, which would remain "untouched."

The power limit proposal is by no means a done deal.

"The good news is that this proposed order is not final and we urge Chairman Genachowski and the commissioners to recognize that the Dish plan delivers on the greatest public interest -- the most investment, the most jobs, and the most spectrum," Dodge added.

However, Credit Suisse analysts believe the order will be approved by the FCC at its meeting on December 12.

 

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