This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Can Dish Blow Up the Spectrum Market?

NEW YORK ( TheStreet) -- Charlie Ergen, the chairman of Dish Network (DISH - Get Report), wants to get into the wireless business in the worst way. He's threatening to blow the market apart if he's not allowed in.

Since acquiring permission last year to use 200 MHz of spectrum in the S Band (slightly longer in wavelength than the WiFi bands at 2.4 GHz) to link Dish satellite service with a high-capacity Internet pipe, Ergen has been stymied in his search for partners, TeleGeography reports.

Dish made a run at MetroPCS, but that company was bought by T-Mobile. Dish turned its attention to Clearwire (CLWR), but that company combined with Sprint (S) and Japanesse businessman Masayoshi Son. Dish offered a premium for Clearwire, but Sprint already owns 51% and has rebuffed Ergen's advances.

Now Ergen has told an AllThingsD conference in California, according to Bloomberg News, that if he can't find a partner, he'll sell the spectrum. He claims the spectrum could be worth "billions of dollars."

But is it?

Spectrum is worthless unless it's used. In throwing in his hand, Ergen would be admitting he can't use the spectrum profitably. If DISH can't create something worthwhile with those 200 MHz, even combined with its own satellites, who else can?

There are few potential buyers, AT&T (T - Get Report) and Verizon (VZ - Get Report) being the leaders.

AT&T has the cash to be a buyer, but there are anti-trust worries. Verizon Wireless has been dropping cash lately and may be unable to secure financing. Plus, again, there are anti-trust worries. Sprint, combined with Clearwire, would seem to have more than enough spectrum for its own needs. T-Mobile, the fourth player in the market, seems tapped-out after its acquisition of Metro PCS -- it will need to spend heavily to unify the two networks.

There has long been an assumption that spectrum is scarce, that it's a license to print money. The industry is now gearing up to fight Federal Communications Commission plans to "unlicense" new WiFi spectrum, the Baltimore Sun reports, arguing it would be better off selling those rights to incumbents.

But if Ergen can't draw a bid for his 200 MHz, what is that claim of spectrum's value to the government worth? If that claim really is worthless, why shouldn't the FCC just define the use of our spectrum through the licensing of devices, as companies including Google (GOOG - Get Report) and Microsoft (MSFT - Get Report) have suggested, rather than by selling it to carriers?
1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
CLWR $0.00 0.00%
DISH $44.09 -4.24%
GOOG $701.43 0.82%
MSFT $49.94 0.14%
S $3.44 -0.86%


Chart of I:DJI
DOW 17,660.71 +9.45 0.05%
S&P 500 2,050.63 -0.49 -0.02%
NASDAQ 4,717.0940 -8.5450 -0.18%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs