DISH Spectrum: Opportunity Or Red Herring

DISH has been making the headlines heavily in recent weeks, mainly for the merger with Echostar. Alongside discussions about the "strategic opportunities review" and spectrum moves, it has once again turned the attention to DISH's wireless spectrum. But what about it?

It's exactly for reasons like this that I partnered with Brian Goemmer at Spektrum Metrics. Our goal is to synthesize a lot of disparate data into one place, our new series Spectrum Deep Tracks. In our first release, we explore each of DISH's bands to provide more context about the band, how it works, who's in it, and how to think about value.

Let me share some context in case you haven't been following the telecom news. DISH has amassed a tremendous trove of wireless spectrum, which is critical to creating a nationwide mobile network.?

These spectrum "licenses" (issued by the FCC) allow an operator to transmit and receive on specific frequencies that are enabled in radios at the tower or in the handset or mobile device. An operator's ownership of spectrum licenses is a critical differentiated advantage relative to others to deliver better experiences, control costs, and enjoy new features on the network.

From our report's Executive Summary,

A key area of focus in the industry is DISH's deployment of this spectrum as part of their 5G network efforts. As a result of the T-Mobile/Sprint merger and the subsequent Department of Justice (DOJ) order in 2020, DISH became the "fourth" nationwide mobile operator to maintain competition in the marketplace.

Given DISH had acquired different spectrum bands over the prior years, each band had different "performance" benchmarks and milestones from the Federal Communications Commission (FCC). This created significant complexity in both building and reporting to ensure that DISH could build the right bands in the right order and under an aggressive timetable to maintain compliance with FCC licensing rules.

Thus, in September 2020, the FCC issued an Order of Modification and Extension of Time to Construct to DISH that effectively aligned all milestones to this order. It further accepted DISH's proposed milestones, which include delivering 5G service to 70% of the U.S. population by June 2023, as well as other commitments. Upon completion of this milestone (already achieved as of this report), DISH is now required to meet June 2025 milestones."

So, the big question on everyone's mind is whether DISH will meet its buildout goals in June 2025, and if not, what will happen. Just to pique your interest a bit more, here are some key questions and considerations that we touch on in the report:

1. What does DISH do PRIOR to the build, and what could they do AFTER the build?

If DISH misses the June 2025 deadline, some of their licenses could go to the FCC while they still retain others. This implies that you need to understand the requirements for each band to build and meet and what degrees of freedom you have after the license performance date.

1. What constraints must DISH operate under?

DISH indicated they would not sell specific frequency bands in their 600 MHz and AWS-4 as part of the DOJ order. However, at the same time, they said they would not wholesale a portion of their network to any other Tier 1 nationwide provider.?

This limits capital raises but also paints a picture of how they could begin monetizing their licenses today. You have to understand these limitations and the implications on value band-by-band to have a good answer.

1. Who is potentially interested in DISH's spectrum?

Many just lump DISH's spectrum monolithically as a single "thing" that can be bought and sold. The reality is far more nuanced since each and every band serves different purposes and has more or less utility for different operators based on their own spectrum ownership and choices. Understanding each band is necessary to break this apart.

1. How do you even begin to think about valuing the spectrum?

Very smart people like to look at DISH's portfolio and assess values against it based on various comparable transactions. That said, the exact specific method has to take in many real factors to understand the actual utility, to whom, and whether they even care. That gets ignored frequently, which is why we've included considerations on this for every band.

1. What could transactions even look like?

While we don't go into detail in the report, there is a fundamental question of what would be for sale or lease and who would be the seller. If it's DISH, your approach to a transaction and value will be different than if you think it's the FCC.?

The other wild card to consider is the timeline between those two. After all, the FCC has a lot on its plate these days. We still haven't auctioned AWS-3, even though that auction was 10 years ago!

If you'd like to explore these concepts in more detail, I encourage you to check out the paper for sale at the Spektrum Metrics website. We've included a free download that walks through DISH's 700 MHz block.

What other spectrum topics are you curious to learn more about?

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