DISH Network has been refused an immediate waiver to let it build a ground network using its satellite frequencies, as the FCC wants to consult until after Obama is re-elected.
DISH was hoping to follow LightSquared's lead in building a terrestrial network operating in the frequencies formerly reserved for satellite communications, only DISH could do it without upsetting the GPS crowd as LightSquared has done. But now the FCC has decided it wants to consult on the issue, pushing any decision back to the end of the year and past the US presidential election.
The FCC did say that DISH can buy the 40MHz of spectrum, which is currently split between failed satellite-phone companies DBSD and TerreStar, but DISH failed to get approval to run a ground-based network in the bands or to build handsets (or other network devices) without the capability to receive a satellite signal.
During the company's earnings call last week, DISH Network's CEO put it bluntly: "If, by chance, we were not granted a waiver or it was kicked down the road without a decision through rulemaking, then I think that we'll have to consider the risk ... we may have to write down some of the DBSD, TerreStar assets because obviously, to the extent we couldn't use them, they probably wouldn't be worth the $3 billion or so that we paid for them."
Satellite operators are allowed to run limited ground-based networks, in the same bands, to fill in gaps in their coverage where there's no line of sight, or to push the signal into buildings. LightSquared's audacious plan (aped by DISH) was to turn that model around and use a single satellite to patch gaps in a terrestrial network, and, critically, LightSquared got an FCC waiver saying that devices did not have to be able to use the satellite at all.
That's important as satellite phones are expensive – and bulky – making them even harder to sell. With the waiver LightSquared can build a ground network and sell handsets with satellite capability, competing directly with the existing carriers who paid a fortune for their unencumbered spectrum.
LightSquared's cunning plan fell down when the GPS industry noticed it would be making a lot of noise next door (spectrally speaking), and the whole issue became (and remains) hugely political as both sides seek to muddy the debate as much as possible.
The frequencies DISH wants to use are well clear of GPS, but the FCC won't want to take any chances. Not to mention that if DISH were to be given a waiver then it would become an attractive acquisition target for AT&T, which could also become a politically charged process in an election year.
Now the plan seems to be (according to the congressional newspaper The Hill) a wholesale removal of the restrictions on the satellite spectrum, rather than case-by-case waivers. That would be a better solution, but will take a year or two to happen and won't solve the GPS problems plaguing LightSquared.