Will Dish and Sprint Duke It Out Over Clearwire Spectrum?

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Spectrum has become an asset so valuable that it is now seen as an equivalent to gold, oil, and water, stated Dish Network’s (NASDAQ:DISH) Chief Executive Officer Joe Clayton at the Consumer Electronics Show in Las Vegas on Tuesday. Just as those commodities have sparked battles throughout human history, the finite supply of spectrum has prompted a confrontation between pay-TV provider Dish Network and wireless communications provider Sprint (NYSE:S) over the spectrum holdings of Clearwire (NASDAQ:CLWR).

While Sprint’s offer of $2.2 billion, or $2.97 per share, was approved by Clearwire’s board in mid-December, Dish Network announced a competing $2.28 billion bid on Tuesday. The pay-TV provider’s proposal is well in-line with its efforts to create a wireless network of its own; the company has already spent $3 billion on spectrum to secure much-needed capacity. But some analysts see Chairman Charlie Ergen’s actions differently, speculating that he is amassing valuable spectrum to flip for a profit.

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Sprint, which owns a 50 percent stake in Clearwire, could put a stop to Dish’s acquisition plan because any deal would hinge on its approval. Clearwire’s spectrum would give the nation’s third-largest carrier more spectrum than AT&T (NYSE:T) and Verizon (NYSE:VZ) combined.

Dish Network and Sprint have had confrontations before. The swath of spectrum that Dish Network purchased in 2011 was only approved by the Federal Communications Commission to build a wireless network if the power and emissions for the company’s uplink spectrum were limited. The agency tagged this caveat onto Dish’s proposal in order to protect against interference on a neighboring spectrum band. This amended agreement, which Ergen believed would hurt the company’s competitive edge, was supported Sprint, as the wireless carrier is expected to bid on the neighboring band when it is auctioned off by the government.

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