Dish Network Seeks FCC Approval of TerreStar-DBSD Merger
PONTE VEDRA, Fla. — Satellite television broadcaster Dish Network asked U.S. regulators Aug. 22 to approve the merger of two bankrupt companies that planned to deploy hybrid satellite-terrestrial wireless broadband networks in the United States, and that Dish has purchased.
In making its request to the U.S. Federal Communications Commission (FCC), Englewood, Colo.-based Dish said merging the S-band satellite systems of TerreStar Networks and DBSD North America into a single entity would make the provision of mobile satellite broadband services a viable business.
Dish purchased TerreStar and DBSD North America following the companies’ Chapter 11 bankruptcy filings. The combined price of about $2.8 billion gives Dish access to 40 megahertz of spectrum in the 2-gigahertz, or S-band, section of the radio spectrum.
In its FCC application, Dish noted that an S-band system does not suffer from the interference concerns that have slowed deployment of rival’s terrestrial-satellite project, which uses L-band spectrum.
Reston, Va.-based LightSquared, owned by hedge fund Harbinger Capital Partners of New York, is facing heavy opposition to its service by users of the GPS satellite-based navigation and positioning system. GPS manufacturers and several U.S. government agencies have said LightSquared’s service, using up to 40,000 terrestrial towers to provide bandwidth in urban and suburban areas, and satellite links in low-population regions, would interfere with various GPS applications.
LightSquared has offered to delay deployment of its service in the section of L-band spectrum closest to GPS frequencies pending development of filters that would enable GPS receivers to function without interference.
GPS industry representatives have asked the FCC to prevent LightSquared from deploying its service until the interference issues have been resolved. The FCC is now reviewing LightSquared, and it remains unclear how, or whether, it will permit the company to proceed with its multibillion-dollar network.
Into this environment comes Dish, offering its S-band capacity as a way to provide a mobile satellite system buttressed by terrestrial-only customers that can compete with terrestrial wireless network operators.
“Dish’s plan will not raise the technical issues that have hampered the use of MSS [mobile satellite service] L-band, such as the interleaving of the operators’ assignments and the severe interference claimed by systems operating in adjacent spectrum,” Dish said in its FCC application.
LightSquared has reached an agreement with L-band mobile satellite services operatorof London to arrange each company’s spectrum in a way that gives LightSquared maximum use of the resource. The company has agreed to pay Inmarsat hundreds of millions of dollars in exchange. These payments have already begun.
As expected, Dish asked the FCC to give the combined TerreStar-DBSD a waiver to existing regulations with respect to the deployment of a terrestrial-satellite network.
The U.S. regulator had granted mobile satellite services operators the right to provide a terrestrial wireless service using the same spectrum as used by these operators’ satellites, on condition that the satellite service not serve as a mere adjunct to a terrestrial broadband business.
Among other conditions, the FCC required that all handsets be dual-mode, capable of receiving both satellite and terrestrial signals.
LightSquared subsequently convinced the FCC that this requirement would cripple the mobile satellite operator against the terrestrial competition. Making handsets satellite compatible means they will be, in general, larger and heavier than terrestrial gear.
Dish wants the same waiver, and makes many of the same arguments. The company suggests, but does not directly assert, that it may not be able to close its business case unless the FCC allows it to sell both terrestrial-only and dual-mode handsets.
Dish is also requesting that the FCC waive the requirement that it maintain a spare satellite on the ground within a year of starting commercial service using the terrestrial portion of its network, or Ancillary Terrestrial Component (ATC). This consists of towers that operate like a terrestrial cellular network, but using satellite spectrum.
TerreStar and DBSD each have one large S-band satellite in orbit. TerreStar-1 is located at 111 degrees west longitude, and DBSD-G1 is at 92.85 degrees west.
Dish said both satellites are in good health and that should a problem occur on one, the other could provide partial backup. There is no need, Dish said, to order construction of another S-band satellite at this time.
Dish did not detail the deployment schedule for its network, but said the technical standard it will use — LTE Advanced — should be producing commercial devices by 2014. The company said it will detail its rollout plans once the FCC has granted the waivers permitting TerreStar and DBSD to be merged.