FCC Votes 5-0 on Greenlighting Dish Terrestrial Buildout Authority

"This action is a major step to free up spectrum for mobile broadband and to drive new services, new competition, in the mobile sector,” FCC Chairman Juius Genachowski said Wednesday in a news conference after the FCC meeting. “I said in March that we would complete this rulemaking by the end of the year, and I'm pleased that we were able to hit that mark.” Genachowski also noted that the order was approved on a unanimous vote. He predicted that as a result of the order, the H block will be auctioned in 2013. “Beyond that we'll release details as soon as we can,” he said.

Genachowski was asked whether it would bother him if Dish quickly sells its spectrum. “The rules provide what they provide,” he said. “The fundamental obligation of the commission is to make sure spectrum is being used in the market in the way … that drives efficiency and investment and competition.” What “matters is that spectrum now, for the first time, is available for terrestrial, mobile broadband use and will become part of the solution to the spectrum crunch,” Genachowski said. The action significantly advances President Barack Obama’s goal “of freeing up 500 MHz of spectrum for broadband by 2020,” the FCC said in a statement. It will “help meet skyrocketing consumer demand and promote private investment, innovation and competition, while unlocking billions of dollars of value. … Carefully balanced technical requirements will unlock tremendous value in both the AWS-4 band and the 10 MHz H block, which Congress directed us to auction.” The FCC said that proceeds from the H-block auction in 2013 “will help fund a nationwide Public Safety Network for our first responders and reduce the deficit."

Dish credited the FCC with removing outdated regulations and granting terrestrial flexibility for most of the AWS-4 band. “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,” said Senior Vice President Jeff Blum. Dish previously urged the commission to allow it to operate at a level lower than Genachowski proposed in exchange for using the lower 5 MHz of its uplink as a guard band to protect the H block. Some FCC officials said previously that it wasn’t likely to be included in the final order.

Sprint thinks the FCC made a “balanced and equitable decision” on the AWS-4 order “to support innovative, competitive terrestrial wireless broadband services,” the company said. “By allocating this spectrum for commercial broadband use, the commission is helping to bring more wireless broadband directly to customers,” said Government Affairs Vice President Larry Krevor. “Sprint is especially encouraged that the commission has indicated that it intends to hold the H block auction next year."

The approval opens up a range of options for Dish, said Paul Gallant, Guggenheim Partners analyst. One is to build a network in partnership with a company like Sprint, he said. Another would be to merge with DirecTV or AT&T, he said. “If Dish does decide to build a network, most people do expect them to partner with an existing operator to reduce build-out costs."

Adoption of the rules for AWS-4 shows there’s an alternative for building out spectrum to buying new frequencies at auction, a satellite industry attorney said. The Dish order puts momentum behind Globalstar’s request for a waiver (CD Oct 30 p9) that’s similar to what Dish just got and the LightSquared proceeding, where that company wants to share spectrum with the National Oceanic and Atmospheric Administration, he said. “Five years ago, if people said let’s get rid of the ATC [ancillary terrestrial component] rules for MSS and give terrestrial licenses to the company that holds them, you would have seen a lot of pushback on that concept.” Today, because of the need for terrestrial spectrum, this shows that the momentum has shifted on ATC waivers, he said. “You may have to deal with interference issues … but the concept of using this spectrum for a terrestrial service and letting the companies build it out, I think, is not the crazy idea that everybody thought it was when all this started."

Globalstar sees the order’s adoption as a positive development for its own effort to use some of its spectrum for terrestrial services, said General Counsel Barbee Ponder. “We think that Globalstar will be the next MSS provider that the FCC will focus on.” The FCC reached a point where it believes that the old regulatory requirements and gating criteria are no longer in the public’s best interest, he said. “It is now moving swiftly to free up MSS spectrum for wireless terrestrial applications.” Gating requirements, buildout requirements and the ATC rules will be key as the FCC proceeds on Globalstar and LightSquared, for which the agency has proposed to yank a waiver, the satellite industry attorney said. If the FCC gets rid of all the ATC rules, that will be significant, he said. “It’s going to show that the need for getting this spectrum deployed is more than standing by these kinds of rules that have really inhibited the deployment of ATC services.”