Tim Warren

Dish Network agreed to buy DBSD for about $1 billion Tuesday, potentially giving Dish access to 20 MHz of valuable mobile satellite spectrum. The purchase of bankrupt MSS/ancillary terrestrial component licensee, which is subject to approval from the bankruptcy court and the FCC, offers Dish several options, said industry executives. The agreement follows the FCC’s waiver approval last week that allowed LightSquared to offer terrestrial-only services in spectrum allocated for MSS (CD Jan 27 p1). Dish may have similar hopes for the DBSD spectrum, said observers.

The FCC gave LightSquared on Wednesday the regulatory go-ahead that could allow terrestrial service in spectrum allocated for mobile satellite service. The waiver from the International Bureau comes with several conditions meant to allay interference concerns raised by GPS providers and federal agencies, which use neighboring spectrum. The waiver applies to rules that prevent MSS/ancillary terrestrial component licensees from offering terrestrial-only service. LightSquared plans to lease its L-band spectrum wholesale to customers that would be allowed to sell terrestrial-only service. The ability to provide the terrestrial-only service is widely viewed as a necessity for LightSquared’s service to succeed financially. The company is hoped to add competition to the wireless market.

The FCC’s proposed update to the Individual Location Longley-Rice model is “potentially useful” but includes “insufficient improvements to the model,” said Dish Network. It was responding to the FCC’s proposed adoption of a new ILLR model hoped to increase predictive accuracy. The FCC uses the ILLR model to predict broadcast signal strengths and helps determine who is eligible to receive affiliated distant signals, which are meant to fill in where consumers are “unserved” by broadcast signals. The proposed rulemaking was part of the FCC implementation of the Satellite TV Extension and Localism Act (CD Nov 24 p4), which broadcasters and DBS providers have clashed over before. The current model has led to significant overprediction, said Dish.

Hughes Communications is looking for a buyer and has hired Barclays Capital to help auction the company, Reuters reported. Hughes declined to comment Friday. The report, which cited four unnamed sources, said Hughes has been through a round of bids, and another is to begin in February. Industry observers said the sale is a logical next step for the majority owner, Apollo Management, a private equity firm. The first round of bids came largely from private equity firms and other satellite companies, according to Reuters. Hughes shares ended Friday at $60.86, up 18.2 percent.

The FCC seems ready to add secondary market spectrum leasing rules for terrestrial use in bands currently allocated for mobile satellite service, said agency officials and industry executives. A report and order, which are on circulation, are largely in line with the FCC’s rulemaking proposal from last year (CD July 7 p1), they said. The agency’s notice of inquiry on MSS -- which asked for input on various ways to increase terrestrial use of the MSS bands, including incentive auctions -- will be taken up later, said satellite industry executives. The order will also grant terrestrial use as a co-primary allocation in the S-band, said industry executives.

NTIA’s voicing spectrum interference concerns on LightSquared business plans in a letter to the FCC Wednesday (CD Jan 13 p3) may hurt the company’s ability to begin service relatively quickly as a 4G provider, said satellite industry executives. They said it’s still unclear how the FCC will handle LightSquared’s waiver request. A delayed approval could create major development worries for LightSquared, the executives said. The NTIA letter amounts to a strong brake on what has been a relatively quick regulatory process for LightSquared, they said. LightSquared is seeking FCC approval of its plan that could allow terrestrial-only service in spectrum currently allocated for mobile satellite services use.

LightSquared’s plans for mobile satellite services/ancillary terrestrial component spectrum is a cause for concern by government users but doesn’t face insurmountable problems, NTIA Administrator Larry Strickling wrote FCC Chairman Julius Genachowski in a letter Wednesday. Strickling said LightSquared’s proposed use of terrestrial spectrum “would create a new interference environment and it is incumbent on the FCC to deal with the resulting interference issues before any interference occurs.” LightSquared is seeking FCC approval for a business plan that could allow for purely terrestrial use of spectrum now allocated for MSS use (CD Nov 29 p2). The FCC asked for the NTIA’s thoughts about giving LightSquared a waiver of MSS/ATC rules, the letter said. LightSquared’s request amounts to a reallocation of spectrum and should receive much more testing before the FCC approves it, according to GPS interests, who say approval of LightSquared’s application threatens serious spectrum interference.

The satellite industry must remain nimble in its innovation and work hard to come up with a “big new idea” to propel market growth, Intelsat CEO Dave McGlade said Tuesday at the Washington Space Business Roundtable. The big question is “how to get to that next level,” he said, using Sirius XM as an example of the right kind of idea. Venture capital, which most industries use as a vehicle for innovation, doesn’t “have a huge interest in our industry,” so a different vehicle may be necessary, he said. McGlade raised the idea of “maybe a new role” for an association.

FCC action in developing rules for efficient use of V-band spectrum will help allay the shortage of feeder link spectrum for broadband use but it should move forward with a “light hand,” the Satellite Industry Association said in comments on the FCC’s proposed rulemaking for the band. The FCC is working toward making rules meant to increase the sharing of 37.5-42.5 GHz spectrum by terrestrial and satellite services. The agency should “embrace a flexible regulatory approach that does not impinge unnecessarily on satellite operators” that are designing systems to work with international and FCC spectrum frameworks, said SIA.

The FCC’s new net neutrality rules are largely a non-issue for many satellite companies, said industry executives. Although some of the same issues affect satellite networks as impact terrestrial services, including limited spectrum and network management, most satellite companies don’t expect to discriminate among content based on its source, they said. While satellite broadband companies had some initial concerns over universal service fund implications of a Title II net neutrality push, which never came, they're largely unaffected as well (CD Dec 17 p5).