MSS Waiver Not Certainty for Dish, Say Executives

The LightSquared order probably isn’t an indication of future leniency for rules in the band, said industry executives. MSS operators shouldn’t expect similar waivers of MSS/ATC rules “given the FCC’s efforts to tie the waiver to considerations specifically relevant to LightSquared,” said satellite lawyer Maury Mechanick of White & Case. Still, the LightSquared waiver “signals an openness to considering waiver requests from other MSS players that can mount credible arguments for why gating criteria applicable to them should similarly be relieved or waived,” he said. The LightSquared waiver also likely was an “accelerator” of Dish’s efforts to take control of DBSD and its spectrum, said Mechanick. The waiver probably added significant incentive to move quickly on DBSD because “the longer they waited, the more expensive it would have become,” he said. Dish and DBSD declined to comment for this article.

While the LightSquared waiver may have shown the commission’s willingness to allow some terrestrial-only service in MSS bands, “any future FCC action would depend on who the players are and the type of business they propose,” said a MSS industry executive. Dish would have to present very specific business plans if it does seek a waiver, the executive said. There are different propagation characteristics in the S-band, compared to the L-band where LightSquared will operate, and other unique characteristics that make the situation somewhat different that LightSquared’s. The actual need for a waiver or modification will also depend on the business plan -- some uses could be found to fall within existing rules and authorizations for the band, whereas others might require modification of the ATC authorization or waiver of the rules, said the executive.

Globalstar, another L-band MSS licensee, has indicated it hopes to get the same treatment from the FCC in its efforts to use the spectrum terrestrially. Responding to the LightSquared waiver, Globalstar said it looked “forward to the FCC extending similar flexibility to other mobile satellite services providers including Globalstar.” Globalstar was told by the commission last year that a waiver for MSS/ATC gating criteria wouldn’t be granted, forcing Globalstar to stop offering terrestrial services in the spectrum (CD Sept 16 p6).

Although many have speculated that Dish CEO Charlie Ergen could end up with a total of 40 MHz of spectrum through sister company EchoStar’s involvement in S-band licensee TerreStar’s bankruptcy, that isn’t necessarily a done deal, said an industry executive. Dish and EchoStar are controlled by Ergen. EchoStar has agreed to provide $75 million in debtor-in-possession financing, but bankruptcy court approval isn’t a sure thing and several other groups continue to be interested in TerreStar, the executive said. Dish’s deal is likely a positive for the MSS industry given the early indication that the company doesn’t plan to focus on an MSS business, since there are other players in that segment already, said the executive. Dish could want the spectrum for terrestrial use rather than actual MSS service. Dish may need a waiver to do so.

If necessary, Ergen may have other options in gaining a waiver allowing for terrestrial service, BTIG analyst Walter Piecyk wrote investors. If Ergen gains control of the combined 40 MHz of spectrum held by TerreStar and DBSD, he would have as much spectrum as Sprint and T-Mobile and a powerful bargaining chip, said Piecyk. Dish could trade pieces of its spectrum holdings back to the FCC for loosened S-band requirements, he said. The agency could be interested because DBSD’s spectrum is adjacent to the AWS J-block, and the addition of some DBSD spectrum to that block would add serious value at an FCC auction, Piecyk said.