AT&T and Dish: Rumor or Cage Rattling?

According to Credit Suisse analyst Stefan Anninger, a seven-page FCC exparte AT&T penned may be a strong indicator of the carrier’s interest in buying up the 40Mhz S-band spectrum currently controlled by Dish Network.

After separate bankruptcy proceedings last year, Dish Network now holds DBSD North America, Inc. and TerreStar Networks, Inc. and their satellite spectrum licenses. Dish recently petitioned the FCC for an ancillary terrestrial component waiver that it says it will use to provide a wireless-hybrid 4G LTE network.

In its letter to the FCC dated January 26, AT&T states that it supports Dish’s efforts to gain approval in transferring the DBSD North America and TerreStar licenses to facilitate the new service.  However, AT&T is advocating an aggressive network build out for the service, requiring network availability to 100 million people in 33 months, arguing that Dish Network should be held to the same build-out schedule as that required of LightSquared, currently waiting for FCC approval for a similar venture.

The Dish build-out schedule request also may be a very strong signal that AT&T, currently trailing rival company Verizon in controlling requisite amounts of spectrum to support high-speed Internet and video services, has eyes on buying Dish Network.

AT&T abandoned the $39 billion T-Mobile USA acquisition at the end of 2011 after the Department of Justice and the FCC both issued notices opposing the deal. Considering the reversal AT&T is making in the January 26 letter on the Dish Network petition from comments filed late last year concerning the Dish Network project, AT&T may have revealed its purchase target in its quest to attain additional spectrum.

In a January 31 Bloomberg article on AT&T and Dish Network, Stefan Anninger of Credit Suisse values the Dish spectrum at $8.6 billion, using the recently announced and pending Verizon $3.9 billion purchase from Comcast, Time Warner Cable and Cox Communications of unused spectrum as his base of measure.

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