NEW YORK — A mystery surrounds satellite broadcaster Dish Network’s surprise, $712 million winning bid in the government’s recent auction for radio spectrum reclaimed from television stations.
Will Dish start a mobile video service? Will it try to offer interactive services to better compete with cable companies? Or will it simply wing it? Dish is mum. It is barred from talking about its plans until the close of business April 3, which is the deadline for down payments on the auction winnings. The auction winners were revealed last week.
Dish won the old UHF channel 56 in the whole country except for New York, Los Angeles, San Francisco, Philadelphia and Boston.
That lets Dish cover three-quarters of the U.S. population, making the $712 million price tag a bargain compared with the combined $16 billion that Verizon Wireless and AT&T Mobility is paying for larger chunks of the airwaves.
The wireless carriers will use that spectrum to expand broadband services, but Dish’s spectrum is likely too narrow to support a competing service, analysts say.
So what is Dish thinking?
“There’s more questions than answers at this point,” said Craig Moffett, an analyst at Sanford C. Bernstein.
There were even questions about who was doing the buying. The company known as EchoStar Communications changed its name to Dish Network at the beginning of the year, while spinning off its equipment-making arm to a separate company, EchoStar.
But the initial filing to take part in the auction was made last year, under the EchoStar name, causing some investors to believe it was the equipment arm that was participating.
“In a way, it immobilizes strategic thinking when you say ‘I have to do something really new,’ ” said Victor Schnee of Probe Financial Associates.
Dish theories
A number of theories are floating around with Dish Network winning a recent radio-spectrum auction:
• Dish could launch a television service, a risk for a type of service that has seen “underwhelming” demand from consumers.
• It could mitigate one of the drawbacks of satellite broadcasting, that set-top boxes only receive, not transmit, signals. But the boxes could communicate with a terrestrial network that uses the acquired spectrum. A customer, for instance, wouldn’t need to hook the box up to a phone line to order pay-per-view movies. The boxes could also report on customer viewing habits, valuable data for advertisers.
• Or Dish has no plan. A consortium of cable companies led by Comcast bought spectrum for $2.4 billion in 2006 and hasn’t yet said what it will do with it.
The Associated Press
