Credit Suisse has advised clients it believes the Federal Communications Commission will grant waivers to Dish Network to operate a terrestrial mobile broadband network.
Dish on Aug. 22 asked the commission to consolidate the transfer of satellite licenses that came with Dish's purchase of TerreStar and DBSD out of bankruptcy earlier in 2011 and -- citing commission precedent -- asked for a waiver of the FCC's integrated service requirement so it can use the combined spectrum to offer terrestrial-only receivers as part of its planned hybrid terrestrial-satellite broadband service.
The FCC granted LightSquared a waiver for its hybrid broadband service in the wake of a National Broadband Plan conclusion that "gating" criteria, such as the integrated service mandate, have made it difficult to achieve the Commission's goals of a more efficient and flexible use of spectrum. But issues about GPS interference from LightSquared has put the FCC's authorization on hold, and a host of government agencies are arguing that until, and if, those problems can be resolved, there are too many threats to airline safety, first responders, weather forecasting and a litany of other things to allow LightSquared to proceed.
Following a conference call with a "D.C. regulatory/satellite expert," Credit Suisse said it believed the FCC would grant the waivers, with "relatively benign conditions. It cited "1) the FCC's and Obama administration's goal of widening the availability of broadband, especially in rural areas, (2) LightSquared's continued struggles to successfully launch its network, (3) the long period of time that it will take for the FCC to reclaim spectrum from broadcasters via incentive auctions." Conditions, it said, would likely hinge on "whether the FCC is granted incentive auction authority by Congress in the next six to 12 months" [the President has made the auctions a part of his jobs bill that he is sending to Congress ASAP], and LightSquared's ability to overcome interference issues and capital constraints to successfully launch its own wireless network.
In its filing, Dish offered some build-out commitments. The FCC could ask for more, said Credit Suisse, but added that in Dish's favor are "Dish's access to capital, its satellite expertise, its base of 14 million customers, LightSquared's continued woes, the administration's continued desire to show success around its Broadband Plan."