HedgeFundLIVE.com – Dish Network is currently trying to take control of bankrupt DBSD (a subsidiary of ICO Global Communications Ltd.) and Echostar is TerreStar’s largest creditor.
Charlie Ergen is the founder of both Dish Networks and Echostar so why is he trying to buy these two bankrupt satellite operators. Well, the answer is in the wireless spectrum that these two companies own. DBSD and TerreStar each own 20MHz of S-band MSS spectrum. This spectrum can be used to one day build a nationwide wireless broadband network assuming the company can get the requisite waiver from the FCC of its Ancillary Terrestrial Component (ATC) Service Rule.
Given that LightSquared recently received this very waiver from the FCC and, as part of the National Broadband Plan, the FCC is currently looking for ways to accelerate the terrestrial deployment of MSS band spectrum, I don’t think that this is an exceedingly difficult waiver to obtain. So, given the above, I think that Charlie Ergen plans to combine the two 20MHz blocks from each of DBSD and TerreStar to create one large 40MHz piece of wireless broadband spectrum so he can either build out a wireless broadband network or hold the spectrum and then resell it in coming years to some other company who wants it more and is willing to pay a much higher price.
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