Dish Chairman Outlines State of Play for Terrestrial Service Efforts
Chairman Charles Ergen said Dish Network took the right steps to move toward building out terrestrial service. “We create competition” and “we have credibility,” he said Tuesday at a Silicon Flatirons event at the University of Colorado. “There’s precedent for companies to be able to use their satellite spectrum terrestrially.” Dish did its homework and learned that there was interference and “we went after frequencies that are pretty clean,” he said.
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The FCC’s approval of a rulemaking notice that would convert the 2 GHz band from satellite-only spectrum to allow wireless use would be a first step, Ergen said. “If we get in the business, it would be a long shot that we could compete against AT&T and Verizon.” But “it seems like something we want to try to do.” Ergen commended LightSquared for being innovative in its effort to build a terrestrial component. He noted some takeaways from that stalled initiative: “Politics played a role there that it probably shouldn’t have played.” Dish decided to go to the full FCC for the rulemaking, instead of having it handled at a staff level, he said. The company was careful to evaluate whether the plan was a good one, he added: “If it’s not a good idea, let’s find out about it now."
Planning to take on incumbents requires many facets, including offering a better, less expensive product, Ergen said. It requires an innovative team with the same interests, “you have to get lucky, the technology has to change [and] the timing has to be right,” he said: It also helps when the incumbents “don’t pay as much attention [to you] as they should."
Ergen said the wireless broadband market is competitive, but survival of smaller players isn’t set in stone: “There are only two that are for sure going to survive.” About 12 other players have challenges “and it’s unclear where they're going to end up,” Ergen said.
In the 1980s, the timing was perfect for entering into satellite communications, Ergen said. “We looked at satellite communications from a data and voice perspective because it was so much more economical.” The infancy of the business was intriguing, he said: “I didn’t know much about the business, but neither did anybody else. … I felt like we could start at the starting gate and build as fast as anybody else could go.” Launching satellites independently was risky, “but we knew doing nothing was even riskier,” he said. Dish was turned down by 20 Wall Street firms in its attempt to raise money in its early days, Ergen said.
Ergen said he and his team are attempting to transform the company. Dish does fixed video very well, but there’s not a lot of new housing formation due to the economy, he said: “For us, that’s a good business,” but it won’t be 10 years from now. Putting fixed video with mobile video and pairing mobile data with mobile voice are some options, he added. Dish’s growth in the 1990’s was due in part to good public policy and the cable industry’s comfort in remaining terrestrial, Ergen said: Rep. Ed Markey, D-Mass., and other lawmakers “took a stand against incumbents.” Dish was on the cutting edge of technology and “the technology kept getting better and better,” Ergen said.