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Why Was Dish Network Interested in LightSquared?

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Dish and the wireless spectrum

For a company like Dish Network (DISH), wireless spectrum licenses are a valuable asset. Since 2008, the company has invested ~$5 billion in acquiring wireless spectrum licenses. Dish was asked on its 2Q16 earnings call about the possibility of its buying more spectrum in the secondary market, similar to its bid for LightSquared in 2013.

Dish made a $1 billion bid for LightSquared, which it later abandoned. LightSquared is a company that provides satellite communications. It’s also developing a network to support 5G (fifth-generation) applications.

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On Dish’s 2Q16 earnings call, the company admitted that LightSquared’s spectrum was valuable, but that it was of the opinion that “one of the incumbent players” would be more interested in LightSquared. Dish didn’t entirely rule out buying more spectrum in the secondary market, as the company sees itself gradually “transitioning to a connectivity company.”

FCC’s incentive auction

Dish Network has also filed an application with the FCC (Federal Communications Commission) to participate as a potential spectrum bidder. The FCC’s broadcast spectrum auction began on March 29, 2016. It consists of two parts: a forward auction and a reverse auction.

In the forward auction, mobile broadband providers will bid for flexible usage of wireless spectrum licenses. In the reverse auction, television broadcasters will give up their usage rights for the 600 Mhz (megahertz) spectrum.

Other bidders in the auction include Verizon Communications (VZ), AT&T (T), T-Mobile (TMUS), and Comcast (CMCSA).

Dish makes up 0.2% of the PowerShares QQQ Trust, Series 1 ETF (QQQ). QQQ also has 5.1% exposure to the television and radio sector.

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