TMo and MetroPCS want Dish's spectrum halved

The disputes over US 4G spectrum get more complicated. The latest twist is a demand by T-Mobile and MetroPCS, that Dish Network should be forced to give up about half of its mobile satellite (MSS) spectrum, in which it hopes to deploy LTE. Dish's plan is currently undergoing regulatory review by the FCC, and would need a waiver, allowing terrestrial services in satellite frequencies, to proceed.

Dish owns 40MHz in the 2000-2020MHz and 2180-2200MHz bands, acquired from two bankrupt MSS operators. It aims to build a 4G network, mainly to supplement its own video and TV services, though it could also support some wholesale activities, as the other LTE-over-MSS player, LightSquared, had hoped to do. LightSquared recently filed for bankruptcy protection after it failed to get an FCC waiver because of concerns about interference with GPS services.

Dish's spectrum is at a safe distance from GPS bands, but it is encountering other opposition. TMo and MetroPCS argue that Dish should have to surrender 20MHz of its holdings - which would then be sold to other players - so that it does not get a "windfall" should it sell on its assets to Verizon or AT&T. However, many analysts believe Dish will need more than its current holdings to create a viable mobile broadband network, and is likely to look for further spectrum acquisitions (perhaps of LightSquared's licences) or partnerships. So divesting half its frequencies would not further the cause of creating a viable 4G competitor in the US, one of the FCC's goals.

The Rural Cellular Association has not called for spectrum to be divested by Dish, but wants the FCC to mandate roaming agreements with smaller carriers, at cost-based rates - and to restrict roaming rights for Verizon and AT&T. The FCC has proposed that Dish have its network cover 30% of the US population within three years of gaining approval, although the satellite TV player said last week that it would not have its LTE-Advanced systems in place until 2016.

T-Mobile USA is also seen to be disadvantaged in terms of spectrum capacity, after the failure of its plan to be acquired by AT&T, and is widely expected to seek a new buyer or spectrum partner. However, its CEO Philipp Humm said in an interview this week that the cellco did not need an alliance with another operator and could grow on its own. "We are pretty sizable company; we are profitable and we are on the right path to growth," he told the Seattle Times. "That's really our main point of view, to strengthen our own business and come back to growth. Beyond that we will always look at opportunities to gain additional scale or additional spectrum or strengthen capital structure in the US market. Those are always things we will be looking into."

Humm predicted that more consolidation would come in the industry, although if regulators added "lots and lots of spectrum into the market, the barriers of entry for new people to come into the market would be lowered and you would have new competition".

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