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December 12, 2012

Dish Moves Forward with Smartphone Service after FCC Approval

The Dish Network Corp. has been officially approved to move forward with their smartphone service offering, the U.S. Federal Communications Commission said on Wednesday.

As one of the largest satellite-TV providers in the U.S., Dish Network needed the FCC’s approval to go ahead with its plans to enter the smartphone market, in competition with Verizon Wireless and AT&T Inc.

This idea to tap into the smartphone business is likely to help the network significantly, as Dish Network has been losing subscribers as of late.

The company’s stock closed at $37.02 just before the announcement, a decrease of 0.4 percent.

The proposal to regulate Dish’s airwaves came from FCC chairman Julius Genachowski, and was cleared by the commission by a vote of 5-0.

“The commission has taken an important step toward facilitating wireless competition and innovation. Following a more thorough review of the order and its technical details, Dish will consider its strategic options and the optimal approach to put this spectrum to use for the benefit of consumers,” explained Dish’s senior vice president and deputy general counsel, Jeff Blum.

The proposal was not passed without some controversy, however: Dish originally objected to the FCC’s requirement limiting the power of the network.

Those at Dish argued this limitation would hurt the company’s ability to enter the business and compete with its longstanding competitors already established in the smartphone industry.

Still, Dish eventually agreed, and the FCC passed its proposal.

“Even if Dish loses the spectrum interference battle it’s been fighting, it still got most of what it wanted from the FCC,” said Paul Gallant, managing director at Guggenheim Securities. “No matter how you slice it, this is a transformative outcome for Dish to expand beyond its pay-TV business.”

It seems those at Dish aren’t the only ones excited for this recent decision.

Now that Dish will compete in the smartphone market, Sprint has approached the company to discuss a potential partnership.

Partnering with Sprint would allow Dish to offer mobile-phone service over Sprint’s network, and in turn Sprint would be able to access Dish’s mobile airwaves.

“By allocating this spectrum for commercial broadband use, the Commission is helping to bring more wireless broadband directly to consumers. This will promote economic growth, investment, innovation and increase the economic competitiveness of the U.S.,” said Larry Krevor, Sprint’s vice president for government affairs.

Edited by Brooke Neuman

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