Dish Network shares rose in early trading Wednesday after the FCC on Tuesday night formally cleared it to use spectrum for a terrestrial cellphone network, a move that could transform the satcaster by letting it bundle a smartphone service to its 14 million satellite subscribers.
The stock is up nearly 3% at $37.02.
Dish and chairman Charlie Ergen have shelled out more than $3 billion for spectrum in a wireless play that Ergen sees as crucial in a tapped-out video market. Until now, he’s had to use his spectrum for satellite only — but clunky, expensive satellite phones weren’t big sellers. Now Dish can flex its muscles by going both satellite and terrestrial.
The FCC had already signaled in a draft order that it was likely to expand Dish’s spectrum usage, but with a heavy caveat for Dish that limited the power the satcaster would be permitted. The higher megahertz Dish says it needs for a viable wireless service could interfere with reception on an adjacent band of spectrum called the H Block, which the FCC is preparing to auction. Tuesday’s order also paved the way for a sale of the H Block next year.
Companies like Sprint that may bid for the H Block have lobbied the government to protect that slice of spectrum ahead of a sale. At the same time, Sprint and Dish have been discussing a possible wireless alliance.
Under this week’s order, Dish would have to restrict a portion of its spectrum to avoid interference with the H Block and would need to build out at least 70% of a new network in six years.
“These actions will help meet skyrocketing consumer demand and promote private investment, innovation and competition while unlocking billions of dollars of value,” said FCC rep Tammy Sun.
Approval by the five-member FCC led by chairman Julius Genachowski was unanimous.