FCC Proposal to Help Dish Network Diversify into Cellular Business

International multimedia news agency Reuters reports that communications regulators proposed a more flexible use of satellite airwaves on Wednesday which could help Dish Network Corp. launch a wireless cellular network. The report said that the Federal Communications Commission (FCC) proposed new rules to make a block of mobile satellite spectrum available for mobile broadband use.

According to Reuters, the FCC proposal is in line with the agency's push to free up more airwaves to meet the booming demand for mobile devices like iPads, Android tablets and smartphones.

Reuters reporter Jasmin Melvin wrote that the second-largest satellite TV provider in the U.S. is seeking to diversify its business beyond pay TV. Last year, Dish spent over $3 billion on spectrum purchase from DBSD and Terrestar. Although, FCC has approved Dish's license to acquire the spectrum, it has denied the company's request for a waiver to build a terrestrial wireless network, wrote Melvin.

However, on Wednesday, FCC signaled support for Dish's wireless plans, Melvin wrote. The report quoted FCC chairman Julius Genachowski, as saying, “he aimed to quickly close this proceeding and make the satellite spectrum available for other uses.”

The Reuters report indicates that FCC came under fire from lawmakers for granting a waiver last January to Philip Falcone's wireless start-up LightSquared LP to allow it to offer cellular service to traditional mobile phones.

Melvin wrote that “the agency has since proposed stripping LightSquared of authority it had previously given the firm to use its satellite spectrum for a ground-based cellular network due to interference with the GPS used by airlines, the military and others.”

Conversely, the industry analysts believe that Dish's wireless network will not face the same interference problems as it would be on a different spectrum band. Analysts at Stifel Nicolaus said in a research note, “The question is how the FCC will go about making this change, particularly the requirements it could impose on Dish.”

“There may be some interference issues, but they appear nothing like those faced by LightSquared,” according to the analysts at Stifel Nicolaus.