Dish Network Scores Big at Spectrum Auction

by Matt Klassen on February 2, 2015

The Federal Communications Commission’s so-called AWS-3 wireless spectrum auction has officially come to an end, and while wireless industry incumbents Verizon and AT&T took their fair share of the available resources, in a surprising twist Dish Network emerged as the biggest winner of the auction, securing 700 of the 1,600 available licenses in some of America’s largest markets.

The landmark spectrum auction generated a record USD $45 billion, with AT&T topping the spending spree at $18.2 billion, following by Dish Network, who partnered with several others on its spectrum expenditures, at $13.3 billion. Verizon rounded out the top three by dropping $10.4 billion on its spectrum bids.

While again it’s no surprise to see AT&T and Verizon amongst the largest spenders at one of the most significant spectrum auctions in the last several years, Dish Network’s participation in the auction and its aggressive bidding strategy are clear evidence that the satellite television provider is serious about the wireless business, a slightly confusing statement to make, however, given that it’s not really in the wireless business at all.

What’s Dish doing spending billions in a wireless spectrum auction? It’s a question that’s on many analysts’ lips as the FCC’s AWS-3 wraps up, for despite the fact that Dish is not a wireless service provider, the spectrum the company acquired in this most recent auction will join a significant accumulation of unused wireless resources the satellite TV company already has.

“Everyone wants to know whether Dish was bidding to win or just bidding to raise prices (or even not bidding at all),” equities analyst Craig Moffett from Moffett-Nathanson said in a research note to investors on January 15.

Now there’s no question that Dish Network is interested in entering the wireless market, the company having amassed a whopping 45 megahertz of wireless spectrum over the last several years and making an aggressive acquisition bid for Sprint, one where the company ultimately lost out to Japan’s Softbank. While there is some speculation that other wireless providers, like T-Mobile perhaps, may be in the sights of Dish Network, the fact remains that the only action we’ve actually seen to date is the accumulation of said wireless resources.

Ultimately, as CNET’s Marguerite Reardon explains, “The satellite TV provider may also try to use the spectrum on its own to build a wireless broadband service that could provide an alternative to DSL or cable broadband in parts of the country that lack broadband infrastructure.”

But without any indication of the company’s actual plans for its growing spectrum collection, analysts are left speculating whether Dish is simply acquiring these licenses in order to resell them to wireless providers at an inflated price down the road, or whether the company is truly looking to establish a competitive nationwide network that could rival the likes of AT&T and Verizon.

Amidst such speculation, however, one thing is abundantly clear; Dish Network has to do something with the spectrum. “Eventually, Dish will have to deploy the spectrum it holds or sell to a field of bidders,” said Mark Stodden, an analyst at Moody’s. With spectrum serving as the lifeblood of the wireless industry there’s no way the FCC will allow such resources to go unused, meaning we may see Dish’s plan unfold in short order.

What Dish did reveal, however, is its delight in beating out several of the market’s larger players for some very valuable wireless frequencies. “The auction’s success is a win for the FCC, the American taxpayer, the public safety community and small business,” the company said in a statement, but without details Dish’s auction victory has left the wireless world to speculate as to just how the company’s continued accumulation of wireless resources will actually help anyone.

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Written by: Matt Klassen. Follow by: RSS, Twitter, Facebook, or YouTube.

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