Thank you for inviting me to speak with you today, I’m excited to be here in Orlando.
And congratulations to Jonathan Adelstein on his new role at the helm of PCIA. I have always appreciated working together with Jonathan at the FCC and then RUS. He was a dedicated public servant clearly focused and knowledgeable about rural investment and innovation.
It is also great that Chairman Genachowski is here. I applaud his leadership at the FCC.
He has been a consistent leader on the need for an Open Internet, the need for more robust wireless competition, and the need for more spectrum in the hands of those who will invest in our mobile broadband future. He prevented the AT&T/T-Mobile merger that would have reduced competition in the wireless industry and made it harder for us to compete.
I greatly appreciate his team’s efforts to bring the 2 GHz/AWS-4 spectrum rules to completion. I want to talk more about AWS-4 and the collective opportunity that represents in a few minutes.
But first things first, I realize that I’m a newcomer around here. So today I figure I’d introduce DISH and show how much you and we have in common.
I also want to tell you why the things we have in common play into DISH Network’s plans to transform our company from a satellite TV provider into a cutting-edge, next generation wireless broadband provider that might very well end up doing business with some of you.
As I see it, DISH and the wireless infrastructure industry really have three main things in common:
First, we understand that it’s the physical infrastructure that makes the rest of the communications and technology ecosystem possible. At DISH, we’ve built our business brick by brick, starting with hard assets, just like you have.
Second, we thrive on competition. We like taking risks and building things. And we believe that the more competitors in the market, the better.
I started our business with my friend, Jim DeFranco, and my wife, Candy, out of the back of a pickup truck. We understand what it means to compete against the odds.
Third, you and we know better than most people just how important it is for the government to make decisions quickly, efficiently, and wisely so that investors and risk takers can start building. We’re willing to put our capital at risk. But to do so, we must have clear and timely decisions from the government. You experience this every day when building new tower sites.
Let’s start with the infrastructure that fuels the communications revolution.
People wouldn’t be talking about wireless broadband or cloud computing if it weren’t for hard assets that someone builds and operates to make it all possible.
The members of PCIA get this.
You figure out where the cell towers and base stations need to go in order to make wireless networks function. You wrestle with the local zoning regulations and get the approvals necessary to break ground and bend metal. And now you’re figuring out how to use technologies like Distributed Antenna Systems and other small cell architectures to get better coverage inside and outdoors and address overall capacity constraints.
We at DISH and EchoStar share that same ethic.
Since we started doing business, we have always invested in the infrastructure that gives the customer a better experience. I tell our employees, the customer doesn’t care if you have a mahogany desk or a metal desk. So you get the cheaper, metal desk. But the customer can tell if the signal goes out or the reception is bad. So we invest in the best physical infrastructure possible in order to make the customer experience superior.
The infrastructure in a satellite TV system might seem like a world away from yours but it isn’t.
A communications satellite really is just a cell tower in outer space.
It’s got antennas, receives signals, transmits signals, and uses wireless spectrum issued by the FCC.
The similarities don’t end there. We have to backhaul huge amounts of data. We carry the signals of local broadcasters in every market in the country. So over 1000 individual broadcast video signals are being backhauled by DISH throughout the country at this very moment to our uplink facilities and beamed up to the satellites.
That’s why we run one of the largest data networks in the U.S. It’s also why, like you, we see the promise in emerging wireless backhaul technologies and constantly try to drive down backhaul costs.
So, when it comes to infrastructure, you and we have a lot in common.
This is important because it shows that while we may be newcomers to the wireless industry, we have a pretty good understanding of what goes into running a business built on hard assets and how to leverage that knowledge and scale.
That brings me to the next thing you and we have in common: support for competition.
You say right in your policy statement: “Competition in the wireless industry fosters innovation and lowers prices.”
In a nutshell, we want to do in wireless what we’ve done in pay-TV: enter the market and offer a better product.
When Candy, Jim, and I started our company, we sold large, C-Band satellite dishes out of the back of a pickup truck to rural households.
We built our business one customer at a time, just like many of you in this room did with your wireless infrastructure companies, and things were going well.
But it became clear that the market was changing. New technologies, like high-powered satellites and small dishes the size of a pizza, were on the horizon.
We had a choice: we either could stay put and watch our big-dish business dwindle, or we could take a risk and bet on the future.
We decided to take a risk and enter a much more competitive market in order to survive and grow long-term.
We took our successful C-band business and bet all our chips on building a new company offering small-dish, satellite TV service that could compete with cable. We wanted to take on the big incumbents.
There were plenty of obstacles. The cable industry didn’t want new competition. Federal law didn’t allow satellite to carry the same local broadcast signals as cable. And the other new satellite TV company, DIRECTV, was backed by one of largest corporations in the world at the time, General Motors.
Against that backdrop, we got junk bond financing, bought a satellite, and did a deal to launch the satellite on a Chinese rocket with a 50% success rate. If the launch failed, we were finished. But if the launch succeeded, we would be able to offer a new, better service to people across the USA.
We bet our company on the nose of a Chinese rocket.
The rocket before ours blew up on the launch pad.
Ours worked. And we were off.
EchoStar I, our first satellite, went into orbit in late 1995 and DISH was born. What had started as a big-dish business now was a nationwide pay-TV service competing against the biggest players in the market.
The result for consumers has been overwhelmingly positive.
By offering better service at a lower price, we drove our competitors to do the same. No less than the CEO of Comcast, the largest pay-TV provider by far, credited satellite TV with forcing cable to invest in digital and broadband platforms.
By competing in the market, we helped consumers not only through what we did, but by what we forced our competitors to do.
We want to do the same in wireless, and continue to act as a disruptive, dynamic force that promotes vibrant, competitive markets.
Just as we made a bet on DBS satellite in 1995 when we saw the big-dish business declining, we want to make a bet on wireless broadband today as the pay-TV market now starts to decline.
Let’s face it. We clearly have a wireless market that is dominated by two players, Verizon and AT&T.
Consumers feel this. It’s not a very competitive market. You’re starting to see data caps and higher rates.
This is an industry in need of some creativity and new entrants.
So here’s our plan.
A little over a year ago, we spent three billion dollars to buy two Mobile Satellite Service, or “MSS,” companies out of bankruptcy. Our goal was to transform those companies from servicing truck fleets with mobile radios to offering nationwide wireless broadband.
About ten years ago, the FCC allowed MSS licensees to also use their satellite frequencies for terrestrial broadband service.
But just as the big cable and broadcast companies tried to use their lobbying muscle to stave off competition from satellite TV, the big wireless carriers successfully lobbied to make it really hard to build a hybrid broadband business in the MSS band.
The rules said that if you use a handset for ground-based signals, that handset also has to be capable of closing the link with a satellite. Meanwhile, AT&T and Verizon could keep selling terrestrial-only handsets. Not exactly a level playing field.
But recently, the FCC’s Broadband Plan declared it was time to introduce some real flexibility into the MSS space and get that spectrum shifted towards mobile broadband use.
We made a bet on those MSS licenses.
We told the FCC, if you will quickly give us more flexibility and eliminate the need for all of our handsets to make a link to the satellite, we will enter the wireless broadband market as a new, innovative, aggressive competitor.
And we told the FCC that in exchange for such flexibility, we will build out our network on an aggressive, but commercially reasonable schedule. Creating tens of thousands of jobs in the process.
We said that with flexibility, we can make a less expensive, more robust phone to compete against the other guys in the business.
PCIA, would all of this help your industry?
The logical thing for us is to partner with those who are knowledgeable about the business, in the business, where there’s synergy.
Maybe there are a few companies like that represented in this room.
And let’s not forget, we’re talking about S-Band MSS spectrum that is not yet part of the wireless broadband ecosystem. That means our build is going to be new and different.
Any entrepreneurs in here think they can make money off that?
Ought to be like selling beer in the desert, if you’re any good.
We told the FCC that we’ve put our money where our mouth is, while many corporations sit on their cash. We said we are ready, willing and able to compete.
And this brings me to the third thing you and we have in common:
–an understanding that for us to invest capital and bring good things to consumers, government must make decisions quickly, efficiently, and wisely so that investors and risk takers can start building.
You know something about the need for fast, efficient, wise government decision-making.
You recently won a key fight at the FCC to make sure that local governments can’t drag their feet on tower and collocation siting decisions. The FCC now runs a “shot clock” on local governments to make sure that local tower-siting decisions happen within a reasonable time frame.
You won a key fight in Congress earlier this year. Now, local governments are prohibited from stopping harmless modifications of cell sites. The Federal government can grant useful easements for cell sites and backhaul facilities.
The wireless infrastructure industry understands that when government makes decisions in a timely fashion, when it helps lay the groundwork for investment, business can and should do its part by investing in better infrastructure.
You get this, and so do we.
We applied to the FCC over a year ago to get our new wireless business off the ground. At the time, we had hoped to have an advantage with the new LTE Advanced technology. But that advantage is becoming less by the day because our competitors have a head start and are already testing and upgrading their LTE networks to be LTE Advanced-ready. Our window gets tighter and tighter every day.
The FCC recently allowed Verizon and T-Mobile to acquire big chunks of AWS spectrum. Verizon and T-Mobile can move forward with certainty on spectrum where LTE can be deployed tomorrow.
Verizon, AT&T, and Sprint/Clear all hold upwards of 100 MHz of spectrum. We are still trying to get our 40 MHz off the ground.
We appreciate the efforts of the FCC to do the proper due diligence and are hopeful the rules will be released very soon. I must have been sick the day they gave out patience; and I recognize government sometimes takes longer than I want, but I respect the effort being put into this venture from the top to the bottom of the agency and hope the final result is one that benefits all stakeholders.
In particular, I am optimistic that the agency retains the existing band plan, as it proposed, and crafts rules to allow me to use all 40 MHz for LTE services. I face a big enough spectrum gap at 40 MHz to compete with the national players.
I understand the desire of some wireless players to seek out artificial advantage through this process. One idea that has gotten some attention is one operator’s push to shift all of AWS-4 up 5 MHz. They couch it as a win-win for the AWS-4, and for the H block. We took a look; it does not work. You would sacrifice so much of the value of AWS-4 and there would still be a cloud over H block no matter what happens to me.
It just doesn’t make sense.
Hopefully, as soon as the FCC gives us the green light to proceed with our new wireless business, there will be an “open for business sign” at our headquarters in Denver. As I speak to you here from the land of Disney, home to many great innovations, we welcome your innovative ideas and we may well make some dreams come true. Hopefully you can see that a new wireless broadband competitor will mean great things for your business.
Thank you, again, for the chance to speak with you today. We look forward to working with you, with PCIA, and with the FCC as we continue the strides already made to facilitate the deployment of wireless broadband across America.
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