Dish Network’s purchase of TerreStar could be a plus for LightSquared

Dish Network received final approval last week from a bankruptcy-court judge to purchase bankrupt TerreStar Networks for $1.375 billion, and speculation is running rampant as to what the company is going to do with TerreStar’s 2 GHz of mobile satellite services (MSS) spectrum, otherwise known as S-band spectrum.

The purchase adds to Dish Network’s $1.4 billion acquisition of another satellite-communications firm, DBSD North America, which also was in bankruptcy. Together, DBSD and TerreStar give Dish access to 20 MHz channels of S-band spectrum. Today, TerreStar offers satellite service to public safety and enterprise users via a satellite/terrestrial handsets provided by AT&T Mobility.

Coinciding with the acquisitions is the FCC’s recent call for input on approaches to encourage the growth of terrestrial mobile broadband services in the 2 GHz band, in its quest to secure more spectrum for the wireless industry for mobile broadband services. The filing deadline was July 1. A filing from Dish Network was not found in the FCC’s database, but TerreStar’s own filing called for flexibility to use the band.

Dish Network did tip its hand somewhat when it recently made an ex-parte filing with the FCC, which detailed how Thomas Cullen, the company’s executive vice president of sales, marketing and programming, met with Rick Kaplan, the chief of the FCC’s wireless telecommunications bureau. During the meeting, Cullen made clear the company’s opposition to AT&T’s proposed $39-billion acquisition of T-Mobile USA and said it was doing so because the acquisition “would harm competition and consumers by, among other things, potentially discouraging Dish Network from entering the market to provide mobile broadband.”

But what’s more interesting to me is the possibility of Dish Network becoming a partner with LightSquared, as it could become an alternative source of spectrum for LightSquared’s potential wholesale customers. LightSquared might want to look hard at such a scenario, given that it is under fire from the GPS community over the fact that its operations could interfere with GPS signals.

LightSquared, which is proposing to build a wholesale nationwide LTE network in the L-band satellite spectrum, has proposed to use just a 10-MHz swathe of its spectrum to avoid interference with GPS signals, but the GPS community remains unconvinced.

In January, the FCC granted LightSquared a waiver that would allow the company to provide terrestrial-only service in its L-band spectrum, which previously was allocated for hybrid satellite/terrestrial use. The spectrum sits adjacent to frequencies used by GPS receivers, and the FCC directed LightSquared to work with the GPS community to research potential interference.

LightSquared’s new plan calls for the company to avoid launching service in the upper portion of the band, where interference has been discovered, according to many reports. Instead, it will use the lower-portion of the band, from 1526–1536 MHz. (LightSquared owns 59 MHz of spectrum in the 1525–1559 MHz band.) As part of this revised plan, LightSquared also would modify its FCC license to reduce the maximum authorized power of its base-station transmitters by more than 50%. This action will limit LightSquared to the power it was authorized to use in 2005, which will provide additional protection to GPS, the company said.

Also, LightSquared is paying Inmarsat to transition parts of its airwaves, so that LightSquared has a contiguous block of spectrum. In its announcement, LightSquared said it entered negotiations with Inmarsat — the satellite company that controls the alternative block of spectrum in the L band — to accelerate the schedule for LightSquared to begin using the frequencies.

Under its original plan with Inmarsat, LightSquared expected to get access to two more 5 MHz channels no later than November 2012, depending on how quickly Inmarsat can clear the band.

Two more 10 MHz channels should be available for LightSquared’s use by the end of 2013. But there are sticky details concerning Inmarsat’s shift from the spectrum, including the fact that Inmarsat’s maritime users, which include the U.S. government, would need to replace their current satellite communications equipment.

I wouldn’t be surprised to see LightSquared and Dish Network strike some sort of spectrum deal going forward. I would put my money on a leasing arrangement as LightSquared works out a mitigation strategy regarding its own spectrum and waits for Inmarsat to vacate its spectrum. The question is: Just how much money is LightSquared willing to put toward its plan of offering a wholesale LTE network?

What do you think? Tell us in the comment box below.