[Satellite News 12-12-12] Pay-TV satellite operator Dish Network and Chairman Charlie Ergen’s long-term strategy to build a nationwide LTE network and succeed where LightSquared failed took a significant step forward after the Federal Communications Commission (FCC) unanimously approved its network development plans and spectrum use in the United States Dec. 11.
   The FCC’s decision came after months of extensive negotiations on the terms of a potential authorization. “These actions will help meet skyrocketing consumer demand and promote private investment, innovation and competition, while unlocking billions of dollars of value,” the FCC said in an official statement.
   If Dish Network had not received the FCC’s consent for spectrum use, it would have been forced to use handsets powered by satellite chips. Now, the company can build a more traditional network that includes ground-based towers. Dish Network can also offer a unique quad-play bundled service of satellite TV, satellite Internet, mobile Internet and mobile phone services.
   The approval does come with a few stipulations. Dish Network is required to hold a portion of its wireless spectrum to prevent its LTE signal from interfering with other communications – an issue that crippled LightSquared’s plan to roll out a similar network. The FCC also asked Dish Network to build at least 70 percent of its planned network by 2018.
   Dish Senior Vice President and Deputy General Counsel Jeff Blum was pleased with the decision, but did not disclose the specifics of how the operator would respond to the green light.
   “Following a more thorough review of the order and its technical details, Dish will consider its strategic options and the optimal approach to put this spectrum to use for the benefit of consumers,” Blum in a statement.
   Interestingly, Dish Network Executive Vice President and General Counsel R. Stanton Dodge put out a recent statement that Dish Network was not happy with the potential of Federal Communications Commission (FCC) limits on its spectrum for future LTE services. “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,” said Dodge, adding that the FCC’s proposed power limits on Dish Network’s LTE bandwidth would prevent it from fully using the spectrum. “Dish Network expects new approvals could add years to a process that has already lasted 20 months since it acquired two bankrupt companies in an effort to bring this spectrum to the market,” Dodge said in the statement. “The change would commence a lengthy processes at both the FCC and the 3GPP [Third-Generation Partnership Project], which defines standards for LTE.”
   Dish Network’s plans to introduce a satellite broadband Internet service in the United States first appeared to the public this past summer, after the launch of the EchoStar 17 satellite in July. Initial reports suggested that the Internet service would be powered by EchoStar 17, which can support download speeds of 15 megabits per second. Some analysts suggested that Dish Network and EchoStar could handle about 2 million new Internet customers with the service.
   Analyst firm Zacks Equity Research originally thought the most likely launch date for the nationwide satellite-based broadband service would fall between late September and early October 2012. “We believe from October 2012, Dish Network will offer bundled satellite TV and Internet to its customers and become a formidable challenger to large cable pay-TV and telecom service providers, which also offers triple-play video, voice and data services,” Zacks Equity Research said in a report. “Moreover, Dish Network is currently waiting for the [U.S. Federal Communications Commission] FCC nod to launch a nationwide high-speed wireless broadband network to offer mobile Internet and phone services to its customers.”
   Dish Network is already providing satellite Internet service via ViaSat’s network, offering connectivity speeds of as much as 12 megabits-per-second in certain parts of the United States. As part of this long-term initiative, the company recently acquired spectrum and related wireless assets from TerreStar Networks and DBSD North America.
   “Using these slots of airwaves, the company can form a formidable video-on-demand service over a wireless network of mobile handsets, such as smartphones and tablets,” Zacks Equity Research said. “Today, cable TV and telecom operators have the technical advantage of being able to offer the ‘triple play’ package of video-on-demand, local HD, high-speed Internet access and telephony. The satellite TV operators, on the other hand, including Dish Network, cannot provide video-on-demand, Internet access or telephony as their platforms lack two-way interactivity (no uplink). The decision of Dish Network to launch satellite Internet service will solve this problem.”
   Dish Network considered partnering with another company in order to more quickly move the process along, according to Ergen, who added that the merge of T-Mobile and MetroPCS has created some uncertainty in the regulatory arena.
   “It is not a surprise that there would be consolidation in the industry,” said Ergen. We hoped that we would have had our license before consolidation started to happen because that would have allowed us to participate and you certainly have more options when there are a lot more people on the table that you can potentially partner with. It is disappointing we are not yet in the game considering everything we have put on the table, but we still have a lot of options. For example, we may not have to build our network from scratch. We could share networks, towers and infrastructure. We really hoped when we started this project that we would actually build a network from scratch, but the timing doesn’t make a lot of sense anymore.”
   Ergen also noted that while his spectrum is ideal for densely populated areas, it is also unsuitable for rural areas. “The government does pick winners and losers, which keeps me up at night. Policy sometimes gets caught up in politics. A great example is LightSquared, though some of their problems were of their own making,” said Ergen. “Our plan has got to be easier than a business plan of launching a satellite on a Chinese rocket that has a 50 percent success rate to compete against DirecTV. Cable companies forced us to become more competitive in broadband. They really have a great broadband product.”