Will the FCC Grant Dish Network’s Wish?
Dish Network has made several attempts in the last year to find a partner to help build its proposed wireless network. As recently as his interview last Thursday, Ergen said that potential collaborator would be a company that, “would like to be in the industry,” but doesn’t have a wireless business yet. MetroPCS (NYSE:PCS) was one of those companies. A document MetroPCS filed with the Securities and Exchange Commission on Friday showed that Ergen made an offer to buy the carrier in August for $11 per share. However, the $4 billion bid was not acceptable to MetroPCS, which announced a deal with Deutsche Telekom’s (DTEGY.PK) T-Mobile in October.
Google (NASDAQ:GOOG) is rumored to be another potential partner. Citing sources familiar with the company, The Wall Street Journal said that Dish Network has held discussions with Google in recent weeks. The technology company is a logical choice; last week, Google began the installation of a fiber-optic cable in Kansas City, Kansas, and is looking to strengthen its data-transmitting infrastructure. As wireless carriers have begun to restrict capacity, Dish’s spectrum would enable Internet users to take advantage of more of Google’s services, including its search engine and YouTube. In 2008, Google attempted to buy wireless spectrum auctioned off by the FCC. However, the company was outbid by AT&T and Verizon.
The FCC’s deliberations make the search for a partner all the more pressing; a collaborator would show the commission that Dish was committed to operating a wireless network, and not interested in selling the spectrum for profit. Furthermore, investors have been concerned that Dish Network could build the network on its own, a move that could be risky. Even Ergen acknowledged that his efforts, which would help diversify Dish Network’s business, are looking “increasingly risky” in light of the FCC’s proposed limitations.
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