The chairman of the Federal Communications Commission on Tuesday proposed to greenlight Dish Network’s long-fought plan to create a wireless service that would compete with those of giants AT&T and Verizon Wireless.
The plan, which needs the approval of the agency’s four other commissioners, would achieve a key FCC goal of creating fresh competition to the lucrative wireless industry, which is starting to resemble a near duopoly.
FCC Chairman Julius Genachowski favored a similar plan by a company, known as LightSquared, that wanted to create a network through satellite signals. But after gaining key approvals by the FCC, LightSquared’s wireless project fell apart after getting hung up by technical problems and fierce opposition from rivals.
LightSquared’s problems and the long delays in Dish’s plans illustrate just how hard it is to create fresh competition in the wireless industry, even as consumers face ever-rising bills and few choices for providers.
Six of 10 wireless contracts are held by AT&T and Verizon. And the two companies have virtually cornered the market on providing the fastest wireless speeds, known as 4G LTE service.
“If approved, these actions will promote competition, investment and innovation, and advance commission efforts to unleash spectrum for mobile broadband to help meet skyrocketing consumer demand, while unlocking billions of dollars of value to the public,” FCC spokesman Neil Grace said.
The FCC is expected to vote on the proposal before the end of the year.
The proposal calls for an auction of airwaves that will be partly used as a communications network for emergency first-responders. That effort, if successful, would realize an 11-year government effort.
During the Sept. 11, 2001, attacks and Hurricanes Katrina and Sandy, public safety officials complained of shoddy service and the inability of different emergency response groups to coordinate and communicate.
In a speech Tuesday, Genachowski emphasized his push to create more competition in the wireless industry. He pointed to the agency’s decision to reject AT&T’s merger with T-Mobile late last year and a planned auction of broadcast TV airwaves as successes on that front.
“The mobile marketplace two years ago was on the doorstep of duopoly. But our rejection, along with the Justice Department, of the proposed AT&T T-Mobile deal, and other pro-competition actions we’ve taken, have led to an improving competition picture in the United States,” Genachowski told the Council on Foreign Relations.
But Dish panned the plan, saying the FCC also attached limits on how it can use its wireless spectrum. The agency’s proposal calls for Dish to use lower power levels on its network to minimize the chance of interfering with neighboring airwaves.
That requirement, supported by rival Sprint Nextel, could limit the capabilities of the network, Dish said. When users upload photos or videos, the process would be much slower, the company said.
“Telling us to lower our power levels cripples our ability to enter the business,” Dish Chairman Charlie Ergen said in a phone interview. “We want to enter the wireless business. We have $6 billion more we want to spend on building out this business. But the FCC could make it extremely risky for us.”
Ergen complained that the FCC has delayed its decision on Dish’s wireless plan by 20 months. If the Englewood, Colo., company had gained approvals earlier, he said, a network could have been built by next year. Now, the company must seek partners and the effort could take until 2015, he said.