The FCC will allow cellular services on a large block of satellite spectrum held by Dish Network and auction off another set of frequencies to raise money for an LTE public safety network around the U.S.
The Federal Communications Commission's unanimous approval late Tuesday of its so-called AWS-4 order may lead to Dish launching its own national LTE service or selling rights to the 40MHz of spectrum to another carrier. The agency also unanimously voted to move forward with a plan to auction another 10MHz of spectrum, called the H Block, which Congress had called for in order to raise money to pay for a uniform, modern public safety network.
Both moves were part of an FCC initiative to free up 500MHz of spectrum for mobile broadband by 2020, in response to what Chairman Julius Genachowski has called dramatically increasing consumer demand for mobile data capacity.
Dish welcomed the AWS-4 decision after saying for months that uncertainty about the spectrum was holding it back.
"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," the company said.
The decision didn't give Dish exactly what it wanted. It includes limits on how much power Dish can use in the part of its spectrum that is next to the H Block, to prevent interference with services in that band. Last month, when the proposal was circulated among the FCC commissioners, the company said those power limits would cripple its ability to enter the cellular business.
However, market realities alone will probably be enough to keep Dish from actually building its own LTE network, according to Phil Marshall, an analyst at Tolaga Research. More likely the company will sell or lease the frequencies to an established carrier, he said. Dish paid about US$2.6 billion for the spectrum by buying two bankrupt satellite companies last year, and the bands are expected to be worth much more with the terrestrial approval in place.
"A wholesale spectrum play would make more sense to me," Marshall said. "The market has already matured to a point that it's very difficult to be a new entrant."
Google reportedly is among the companies that have been in talks with Dish over a possible partnership to offer wireless service, though it's unclear if any deal will be made, and Google has declined to comment.
The H Block consists of two smaller bands of spectrum, each 5MHz across, that sit next to frequencies Sprint is already using for LTE. Sprint is getting by with half as much LTE spectrum as rivals AT&T and Verizon Wireless, and it will be able to double that if it wins the H Block at auction. That would let Sprint deliver higher speeds and be more competitive with the bigger carriers.
"Sprint is especially encouraged that the Commission has indicated that it intends to hold the H Block auction next year," the company said. "By allocating this spectrum for commercial broadband use, the Commission is helping to bring more wireless broadband directly to consumers."
Tuesday's vote approved a Notice of Proposed Rulemaking for the H Block auction, which will be open for comments in a months-long process that will set the rules for next year's auction.