Harbinger-like Spectrum Conditions Said Unlikely for Dish Network
Spectrum conditions restricting the sale or lease of Dish Network’s S-band spectrum to other wireless carriers are very unlikely at this point, said FCC and industry officials. The FCC approval of Harbinger Capital Partners’ purchase of SkyTerra, which created LightSquared, included conditions requiring agency approval for spectrum deals with the top two carriers. Public interest groups have sought similar conditions for Dish. The FCC is reviewing Dish’s request to control the S-band spectrum and use it for terrestrial service.
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The absence of such spectrum conditions is important, especially as speculation has swirled that AT&T would seek a deal with Dish given its spectrum constraints following AT&T’s failed effort to buy T-Mobile. AT&T recently filed in the proceeding, asking for calls for spectrum conditions to be ignored, an important signal, said Credit Suisse analyst Stefan Anninger in a note to investors. The issue hasn’t come up in recent meetings between Dish and the FCC, based on a review of ex parte filings. Dish didn’t comment.
Public interest groups have pressed the FCC to impose conditions limiting how much spectrum Dish Network could lease to AT&T and Verizon if the agency approves a Dish application to use mobile satellite service spectrum terrestrially. Top officials at Public Knowledge and the Media Access Project said Thursday that they seek conditions like those approved as part of Harbinger’s 2010 acquisition of SkyTerra.
The FCC never voted on the Harbinger order, handed down on delegated authority by chiefs of the International and Wireless Bureaus and the Office of Engineering and Technology. At the time, the spectrum condition was the most controversial part of the deal that created LightSquared, earning the agency rebukes from the carriers. It’s unclear whether FCC Chairman Julius Genachowski would seek a vote on a Dish order, FCC officials said Thursday. Verizon and AT&T didn’t comment.
"Since the key public interest justification for grant of a waiver is to support competition, it is important that the waiver be conditioned so that it promotes competition,” said Public Knowledge Legal Director Harold Feld. “It is important to emphasize that a Harbinger-like condition would not prevent DISH from leasing capacity to AT&T or Verizon. It would simply prevent the top two providers from leasing so much of the available capacity that they would effectively foreclose competitors."
Feld said he’s not sure whether the FCC will impose a similar condition on Dish. “AT&T has made it clear that they intend to push back politically on any effort to help competitors get access to sufficient spectrum, and House Commerce Committee Republicans seem eager to pick any fight they can with [Chairman Julius] Genachowski for political reasons.” Plus, he said, “Anything reminiscent of Harbinger/Lightsquared will raise its own red flags, regardless of the merits. As a result, it is unclear if the FCC will even grant a waiver at all.” Media Access Project’s Andrew Schwartzman wasn’t sure how the review will play out. “I think such conditions are certainly possible,” he said. “I don’t know if they are ‘likely.'”
The FCC has a poor history of such conditions, said Free State Foundation President Randolph May. “My view is that the commission should have a policy of flexibility when it comes to the disposition of spectrum and let the marketplace work and certainly not restrict the sale or lease of spectrum to particular parties,” said May. Concerns of spectrum being controlled by too few companies is an issue that should be considered by antitrust authorities, rather than the agency, he said.