Since the previous post, there has been many new developments with regard to spectrum. In yesterdays The Evening Bridge
we have this:
With spectrum auctions now enshrined in the Payroll Tax Bill, "there are hints that DISH may be set to negotiate some spectrum swaps with the FCC that would enable its waiver approval and increase the value of spectrum for the FCC," writes BTIG's Walter Piecyk. The Bill also appears to give the FCC some power to limit the amount of spectrum that AT&T and Verizon can control, although that's up for dispute. Cable ops, says Piecyk, were "losers in the bill as the FCC’s ability to allocate unlicensed spectrum was limited to guardband areas." Read the post here (and don't forget to register).
Piecyk's somewhat technical and long post referenced notes:
The FCC controls two different 5×5 spectrum blocks called the H and J AWS-2 Blocks. Their value is limited given their narrow width and the interference issues. The MSS spectrum that Dish is trying to acquire sits next to the H and J Blocks and as a result Charlie Ergen is in a position to help the government and increase the value of the H and J Blocks through a spectrum swap. We wrote about these possibilities a year ago. Ergen’s willingness to deal could help him obtain a waiver to offer terrestrial services and mute the complaints of any resulting windfall.
The Tax Bill indicates that a downlink of the J-Block would be rolled into the AWS-3 band, increasing the size of AWS-3 to 25 MHz from 20 MHz. This could have been a residual “packaging of spectrum” to get AWS-3 up to 25 MHz so that it could be paired with the 25 MHz of spectrum in the 1755 MHz band that was dropped out of the bill late in the process. There is no mention of the uplink, lower band of the J-Block which sits between Dish’s spectrum and some government spectrum. However, if Ergen agreed to slide up into this J-Block it would increase the usability of the H-Block by inserting a 5 MHz guardband that would help interference and possibly source additional spectrum for unlicensed applications.
...While the headlines will be dominated by politicians talking about how they sourced additional spectrum, a key block of spectrum was excluded from the bill and the incentive auctions of broadcasters spectrum are likely to take much longer to source than the FCC will claim. It is unclear how the FCC will use the AWS-3 band now that it does not have a block to pair it with. TDD-LTE implementations are gaining momentum globally and that could be an alternative or it could play a larger role in the Ergen negotiations than we are aware of. In any event, the early of this expected Spectrum bill might be that it will drive spectrum values down but we believe the reality is different based on the rising usage and the timing of the availability of this spectrum.
Obviously, much is going on inside Charlie's brain relative to all that spectrum Dish has acquired. Should be interesting in the months to come
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