NEW YORK – Dish Network Corp., the satellite-TV company seeking government approval for mobile-phone service, will probably avoid the interference concerns that thwarted a similar plan by LightSquared Inc., executives and analysts said.
Charlie Ergen, chairman of the second-largest U.S. satellite-TV company, is seeking Federal Communications Commission clearance to offer wireless service in competition with AT&T and Verizon Wireless.
He wants to convert satellite airwaves to provide voice and data service over land-based towers, a strategy similar to that of hedge-fund manager Philip Falcones LightSquared, which was shot down by the FCC amid opposition from GPS providers.
Ergen is likely to avoid a similar fate because his airwaves, or spectrum, have certain advantages over Falcones.
The frequencies Dish owns sit further away from those used by GPS devices than LightSquareds, and theres a narrow space between Dishs spectrum and other frequencies, helping mitigate interference with rival carriers signals.
Its not as close to GPS, so its unlikely to interfere, said Matthew Desch, chief executive officer of Iridium Communications, which operates more than 60 satellites. But the approval is going to take some time. The FCC is going to make sure they dont have another LightSquared problem on their hands.
Dish must wait until regulators write rules that allow airwaves now used by satellites to be approved for high-traffic ground-based networks, the FCC said this month. The rulemaking period allows the FCC to examine competitive and technical issues, including potential GPS interference.
The FCC gave LightSquared a partial go-ahead to convert satellite-only airwaves in January 2011, only to say this year it will block approval after tests showed the network would disrupt GPS devices.
Dish will probably gain approval in six to 12 months, said Bryan Kraft, an analyst at Evercore Partners.
While Ergen insists Dishs plan is to become a wireless provider, the spectrums good quality would also make it easier for Ergen to sell the asset.
Analysts said Ergen may seek to divest the spectrum rather than spending billions building a network. Dishs spectrum portfolio may be worth $7.3 billion, according to Barclays Capital Inc.s James Ratcliffe.
Dish said it is reviewing alternatives after the FCC didnt grant it immediate approval March 2.
In February, Ergen said all options would be on the table for how we move forward with the company and the spectrum if the FCC went to rulemaking. Dish spokesman Marc Lumpkin declined to elaborate further on those options.