AT&T eyes Dish spectrum, says analyst

On Thursday, AT&T submitted an ex-parte letter to the U.S. Federal Communications Commission requesting specific conditions be met in regards to Dish Network’s pending Ancillary Terrestrial Component (ATC) waiver request, raising suspicion that AT&T may be looking to Dish to solve its current spectrum shortage.

In the filing, AT&T (Dallas, Texas, USA) asked that Dish (Englewood, Colo., USA) be held to the same buildout requirements for the 2 GHz band as those imposed on LightSquared (Reston, Va., USA), as well as have no restrictions on the transfer or leasing of the spectrum.  AT&T also requested that the FCC not allow Dish to defer buildout requirements by “keying to the LTE advanced standard.”

The buildout requirements AT&T requested be imposed on Dish involve the company committing to providing terrestrial coverage to “at least 100 million people within approximately 33 months, 145 million people within 45 months, and 260 million people within 69 months,” says AT&T in its filing.  The same requirements are currently imposed on LightSquared.

According to AT&T, Dish has made nothing but “vague” references to building out a network in the 2 GHz band, but because of recent the data explosion and a need for more broadband, AT&T sees it as essential that Dish be required to buildout a network with the unused spectrum as soon as possible.

Stefan Anninger, analyst at Credit Suisse, says AT&T’s recent filing represents a “change of heart” in the telecom operator.

While AT&T’s call for the imposition of spectrum build out requirements on DISH’s 2 GHz spectrum assets could be construed as a negative for Dish, what we find most notable is that AT&T’s letter makes no mention of its earlier request to have Dish’s waiver request ‘proceed through rulemaking’ rather than via ‘an ad hoc waiver process,’” says Anninger in a recent note.

AT&T first filed a request in November asking the FCC to require that “any conversion of the 2 GHz Mobile Satellite Service band to predominantly terrestrial operations should be conducted through rulemaking, rather than an ad hoc waiver process.”

So why the sudden change? According to Anninger, since its first filing in November, AT&T’s bid for T-Mobile USA fell through, which has left the second largest U.S. telecom operator in dire need for more spectrum.

We suspect that AT&T’s interest in having Dish’s S-band spectrum waiver grant process proceed via an NPRM are gone for good,” says Anninger.

In fact, according to Anninger this recent filing by AT&T is a sign that AT&T is “more interesting in Dish’s S-band spectrum than ever.”

By requesting that Dish follow to the same buildout requirements as LightSquared, it suggests that AT&T may want to buy to use the spectrum.

“Onerous buildout requirements could increase Dish’s interest in selling/dealing its spectrum,” says Anninger.

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