The FCC Friday cleared the way for Dish to bid on H block spectrum, agreeing to a Dish petition to waive some technical rules on its use of spectrum. DISH had said it wanted to bid, but needed some help from the commission, which it has now gotten.
In a December 2012, the FCC voted to reallocate 40 MHz in the advanced wireless services (AWS)-4 band for satellite spectrum for terrestrial broadband, so dish could potentially use that spectrum for a wireless broadband network, and to approve the auction of adjacent H Block spectrum.
But to bid on that adjacent H Block spectrum, and to bid at least the reserve price of $1.56 billion, Dish told the FCC it would need more flexibility to use that AWS-4 spectrum for downlink as well as uplink, and asked for a one-year extension of its buildout commitment for those AWS-4 licenses.
In exchange, Dish promised to let the commission know how it would be using the AWS-4 band (whether uplink or downlink) within 30 months after the petition was granted, and agree to be a bidder at the reserve price, essentially guaranteeing that at least that price would be met.
The FCC Friday granted the petition with some conditions. The flexibility to use the spectrum for downlink is subject to interference protections. "Beyond the benefits inherent in flexibility," said the FCC in granting the petition,
"the technical waivers DISH seeks offer the potential for compelling public interest benefits, including improved spectrum management."
"[G]ranting a waiver in this instance will potentially enhance wireless broadband competition, encourage innovation, speed up broadband deployment, and increase the supply of in-demand downlink spectrum..." the FCC said.
The FCC rejected Sprint’s request that it impose a specific cost-sharing payment condition on DISH should it be a winning bidder in the H Block auction, and said it "declined to address in this particular adjudication" Sprint’s request for a blanket waiver to future H Block licensees of "certain H Block technical rules."
FCC Chairman Tom Wheeler has said he would walk with a signboard advertising the auction if it would generate participation. Other potential bidders include Cspire, nTelos, Piedmont Rural and James Valley Cooperative Telecom, according to the FCC, but not other big-pocketed majors like AT&T, Verizon, Sprint or T-Mobile.
Dish's participation is likely key to the auction's success.
The H block auction, scheduled for Jan. 22, is the first of three auctions the FCC is conducting to put more wireless spectrum into the market and raise money for a first responder network, the treasury, and to pay broadcasters to move and repack in the incentive auction, which will be the third of the three (now scheduled for mid-year 2014). an AWS auction, which will be the second of the three, must be conducted by February 2014.
The more money raised in the H block auction, the less pressure there is on the other two.
"We view today's news as a big positive for DISH on two accounts," said Equity research in a note to investors. 1) "It provides some certainty and 2) it provides a path to higher monetization of DISH's AWS-4. We reiterate our Outperform rating."