Dish grooming 700 MHz spectrum for mobile TV play? Don't bet on it

Mike Dano

Dish Network has generated a lot of ink recently in its quest to get FCC approval for its plan to build a nationwide LTE Advanced network with the 40 MHz of S-band spectrum in the 2 GHz range it purchased from TerreStar Networks and DBSD North America. However, those S-band licenses aren't the only radio waves that Dish owns.

During the FCC's 700 MHz auction in 2008, Dish (bidding through EchoStar and the Frontier Wireless moniker) purchased around $700 million of unpaired E Block spectrum across the country. But the 6 MHz E Block isn't really suitable for standard, two-way wireless communications. However, it is good for one-way broadcasts--kind of like Qualcomm's (NASDAQ:QCOM) failed MediaFlo mobile TV service.

In fact, mobile TV is exactly what Dish said it might use its 700 MHz spectrum for. According to a January FCC filing, Dish said it has been testing a range of mobile TV technologies in the E Block, including Advanced Television Systems Committee - Mobile/Handheld (ATSC M/H), Digital Video Broadcasting - Handheld (DVB-H), Digital Video Broadcasting - Satellite Services to Handhelds (DVB-SH), and China Mobile Multimedia Broadcasting (CMMB). This testing appears to have been conducted in several locations across the country and during a number of years.

(Interestingly, Dish has been leasing out some of its 700 MHz licenses to Fanvision, which is using them in a handful of football stadiums across the country to rent handheld devices to spectators. "The service typically consists of up to eight channels of content, including alternative camera angles of the event, on demand replays, event play-by-play audio, live video feeds, fantasy sports interfaces, and updated real-time statistics," Dish wrote in its filing.)

What's more interesting though is that Dish still seems to consider mobile TV a viable use of its 700 MHz spectrum. "There are several promising new developments and emerging technologies on the horizon," the firm wrote in its filing. Specifically: "MetroPCS (NASDAQ:PCS) and Mobile Content Ventures recently announced a joint venture to enable MetroPCS customers to watch live, local broadcast television on their mobile phones using the ATSC M/H standard, which indicates that service providers and broadcasters are pursuing broadcast mobile video services and developing a device ecosystem. This could help foster consumer demand for these services and increase the availability of equipment, which Manifest [a Dish subsidiary] can leverage in building its own broadcast mobile video service."

Of course, anyone with a smidge of experience in wireless would know that Qualcomm already tried that. Qualcomm used its own 700 MHz holdings and around $1 billion to build out a series of mobile TV offerings in cities across the country. AT&T Mobility (NYSE: T) and Verizon Wireless (NYSE:VZ) sold MediaFlo-capable phones to their subscribers. The service cost around $10 per month and provided access to a dozen or so TV channels.

Fast forward a few years and Qualcomm and the rest of the industry learned that no one wanted to pay $10 for mobile TV. Qualcomm eventually sold its 700 MHz spectrum to AT&T, which plans to integrate it into its LTE network to add capacity and boost speeds.

The deal between MetroPCS and Mobile Content Ventures is completely different from MediaFlo. MCV is a collection of local broadcasters that are offering a mobile version of their regular, local TV broadcasts. MetroPCS has agreed to install an MCV-capable antenna on one of its forthcoming phones. Most importantly: The Dyle TV-branded mobile TV service from MCV is completely free (at least for 2012, according to the group), just like regular local TV broadcasts are completely free to TVs with rabbit ears. It's a stretch, to say the least, to say that Dish will somehow benefit from local TV broadcasters adding a mobile component to their existing TV broadcasts.

Luckily for Dish, mobile TV isn't its only option. The company also said it could use its 700 MHz spectrum to essentially glue a broadcast service onto an LTE network. That seems like a slightly more reasonable use of its 700 MHz spectrum--and could tie into Dish's plans to build its own LTE Advanced network--but it still presumes that users want content broadcasted to their phones or tablets.

I think the most likely endgame for Dish's 700 MHz spectrum is contained in the last two words of its FCC filing: carrier aggregation. This is the technology AT&T is using to combine Qualcomm's 700 MHz spectrum with its own LTE network. According to AT&T, carrier aggregation will allow it to almost double the speeds of its current LTE network. Thus, I think it's a good bet that Dish will end up selling its 6 MHz of unpaired 700 MHz spectrum to AT&T or another LTE carrier for this same type of technology. After all, AT&T and other carriers have argued they need more spectrum to handle subscribers' data demands, and if carrier aggregation technology can turn 6 MHz of unpaired radio waves into usable mobile broadband spectrum, it's a good bet that's where it's headed.

One final note on Dish's 700 MHz plans: The company will need to make some kind of decision relatively quickly. Under the FCC's auction requirements, Dish must provide "signal coverage and offer service" to at least 35 percent of its 700 MHz holdings no later than June 13, 2013, and to at least 70 percent by June 13, 2019. Can Dish build out a mobile TV network across 35 percent of its 700 MHz holdings in a little over a year? I doubt it. Instead, I think AT&T ought to get out its checkbook. +Mike Dano