DISH Network (Nasdaq: DISH) is planning something big. The satellite TV specialist wants to sell a ground-based video service to complement the old bread and butter and maybe even replace satellites entirely in the very long run. I like that bold thinking, and I've even made a bullish CAPScall based on that strategy.
But it's not all wine and roses. The whole strategy revolves around DISH running a high-speed data network from cell towers. DISH bought radio spectrum in a couple of bankruptcy auctions, planning to use the airwaves to support this 4G LTE network. The final FCC approval needed to bring this Franken-service to life, however, keeps slipping between the company's fingers.
The spectrum that DISH bought was always zoned for satellite signals. The ill-fated LightSquared operation could tell you volumes about the pains regulators take to keep legacy services in that neighborhood ticking -- that company's proposed hybrid between satellite and tower-based signals was shot dead on suspicion that it might mess with GPS signals.
I haven't seen any direct criticisms of the DISH plan to mirror LightSquared's misery, but the FCC keeps putting DISH's approval on the back burner. Last week, the waiver got pushed back once again. FCC officials sound like they will approve the plan eventually, but DISH chairman Charlie Ergen shouldn't hold his breath waiting for the seal of approval (or walrus of consent).
In a sense, DISH is trying to cut in line at the spectrum buffet with the FCC playing the part of a stern lunch lady keeping the kids in line. The rules for this section of the wireless spectrum are expected to relax in due time, but DISH doesn't want to wait for the lengthy rulemaking process. Time is money.
Unlike LightSquared, DISH has a plan B. Having its network plan slapped down, LightSquared saw Sprint Nextel (NYSE: S) pull out of a $9 billion agreement that would have saved the company's bacon. Now, Sprint moves ahead with its old partner, Clearwire (Nasdaq: CLWR), and forgets all about this nasty LightSquared business. Clearwire investors celebrate while LightSquared investor Phil Falcone suffers.
DISH can simply get back to selling satellite TV subscriptions until the FCC gets its rules in order. This is not the end of DISH's 4G ambitions, but the delays are getting frustrating. If you're looking for a stock in the mobile space that Foolish analysts already love, check out this short list of the three best smartphone plays from the chip industry. It's free today, but might be gone tomorrow, so get your copy right away.
