Oct. 4, 2012
Ergen Says He’s Serious About Wireless Broadband Amid Worries of Losing Spectrum, Capacity
ORLANDO, Fla. — Chairman Charles Ergen said that despite some challenges, Dish Network is serious about entering the consumer wireless market, which he sees as ripe for competition. During a Wednesday address at the PCIA show, he addressed several of the problems he expected Dish to confront as it seeks FCC approval to repurpose the AWS-4 band for mobile broadband use. Ergen also recounted the similarities he sees in the current wireless market to the “stale” video market that he challenged in the 1980s and 1990s when he built the company to compete with cable operators. FCC Chairman Julius Genachowski used his appearance at the show to promote the Commission’s announcement of winners for mobility funding, saying 83,000 users will see the benefits of an advanced mobile broadband network. (See separate report in this issue.)
Ergen provided no certainty that Dish’s terrestrial wireless broadband system could ever be built, but said his appearance at the conference showed that Dish was serious about trying to get into the wireless market. “We may end up having to sell the spectrum,” Ergen said. “But I’m here with the intent to get into the business.” Uncertainties in regulation and in the market will affect how Dish moves forward, Ergen said. He said Wednesday’s announcement of a proposed T-Mobile-Metro PCS deal was just another variable to consider. (See separate report in this issue.) “The dynamics change every day,” and Dish will likely pursue partners should it move forward in deploying a network, Ergen said. He said that it will take more than 40 MHz to compete with carriers that control more than 100 MHz.
Delays in FCC approval have already affected the company’s plans, Ergen said. “At the beginning, we hoped to build a network from scratch,” he said. “But the timing doesn’t make sense anymore.” He said he was hopeful that Dish would have gotten FCC approval at the beginning of the year. He acknowledged it would be a “tough project for us,” but also pushed back when asked if it’s a sound business plan to get into a market called “saturated” by one analyst. “I reject that notion,” Ergen said. There are 300 million U.S. wireless devices, but as consumer demand expands and equipment becomes more networked, that number could grow to 10 billion, he said. “The market is not close to penetrated. We are very much on the ground floor.”
“It’s better to have too much demand than too little, but this will be a serious issue,” Genachowski said of spectrum. The “shot clock” regulation to pressure faster local approval of infrastructure upgrade was a positive step and traditional ways that localities approach infrastructure upgrades can’t be sustained as consumer demand grows, he said. New technology can help the FCC address some issues, and Genachowski is “really excited” about small cell towers and cited it as a technology that could help address spectrum sharing. In the case of 100 MHz of spectrum in the 3.5 GHz range, small cell towers could be a potential part of a solution with the Defense Department, which he said he’s regularly meeting with to find ways to expand consumer access to the government-held spectrum. The commission will continue to look for ways to free up spectrum for wireless backhaul use, Genachowski said.
With wireless infrastructure providers being presented with both challenges and opportunities this week, newly appointed PCIA CEO and former FCC Commissioner Jonathan Adelstein told the audience that their industry should recast the coming “spectrum crunch” as a “wireless data crunch.” Adelstein, most recently head of the Rural Utilities Service, praised the White House, Congress and regulators for knocking down some barriers to local infrastructure deployment. This fight will have to continue to be waged, he said: “A vocal minority can thwart the overwhelming majority” of users that want new and expanded wireless services. His industry will meet this challenge, especially as wireless becomes more vital to other industries, such as public safety and healthcare, Adelstein said.
CEOs of companies that own wireless towers told PCIA members there’s much potential with the newly formed FirstNet network, both for business and for lobbying battles. Marc Ganzi of Global Tower Partners said it will be the mission of CTIA and its leading members AT&T, Verizon Wireless and TMobile to get FirstNet to lease capacity on their networks, as opposed to building out a new network. “That’s their agenda, but it may not be our agenda,” Ganzi said. “Our industry agenda will to be our own LTE network” for public safety, he said: “We need to be there, we need to be at the table, we need to be aggressive.” James Taiclet of American Tower Corp. said FirstNet’s success will depend upon whether it can find a strong leader. “It will need a strong leader to withstand all of the lobbying pressure,” he said. Crown Castle International’s Benjamin Moreland said the industry was anxiously awaiting an audience to which to make a case for building new public safety communications infrastructure.
The CEOs forecast continued growth and said more industry consolidation may be coming. Money won’t be an issue, said Jeffrey Stoops of SBA Communications. “Every company on this platform has great access to capital, and debt is extremely important for our industry.” Ganzi said more urban infrastructure upgrades would be “critical” for the industry and that expansion will take a “property-owner centric approach.” While there was interest in new technologies like small cell towers and distributed antenna systems, 70 percent of infrastructure growth will be made through traditional tower placements, Taiclet said. “The U.S. will be a great market for organic growth.” — Terry Lane