Dish Network spent $7.3 billion in the FCC’s 3.45 GHz auction, which is more than the $5 billion that analysts at New Street Research had expected it to spend. But taken with other holdings in the 3 GHz band, it’s looking increasingly like Dish is up to a lot more than meets the eye, according to the analysts in a new report for investors.

The 3.45 GHz auction ended in November, and the Federal Communications Commission (FCC) released the names of the winners in January. AT&T spent more than $9.1 billion, while Verizon was a no-show, apparently satiated with its C-band in Auction 107.

T-Mobile bought more than $2.9 billion worth of 3.45 GHz licenses, which it expects to combine with its Phase 2 C-band winnings for a “one and done” deployment.

Dish, bidding under the name Weminuche LLC, won 31 MHz in the 3.45 GHz auction compared with 40 MHz at AT&T, 12 MHz at T-Mobile and 17 MHz shared among other bidders, according to New Street.

Licenses are divided into ten 10-megahertz blocks based on Partial Economic Areas (PEAs); bidders were limited to a total of four blocks, or 40 MHz, per market.

Typically, bidders’ payments change little during the assignment phase of an auction, which is where bidders choose the specific frequencies of spectrum they won in each market during the clock phase; their payments usually increase on the order of 1-2%, according to the report. But Dish paid 7% more, or nearly $500 million during that phase, which struck the New Street analysts as strange.

What’s up?

One thing that could be in the works, more than so previously believed: Dish is banking on CBRS spectrum in combination with its 3.45 GHz spectrum. With CBRS, “Dish has 50 MHz of contiguous 3 GHz spectrum, ideal for 5G,” wrote the New Street analysts.

The analysts noted that in the past, they tended to ignore CBRS because of its power limits and complicated sharing scheme, treating it more like special-use spectrum, similar to millimeter wave. But “Dish is clearly thinking about it differently,” they wrote, noting that Dish secured the 3.45 GHz spectrum licenses that are immediately adjacent to its CBRS Priority Access Licenses (PALs).

Dish was a large bidder in the CBRS PAL auction in 2020, winning the most licenses (5,492) at a cost of $912 million. (Verizon spent more but acquired fewer PALs.) Since then, Dish has urged the FCC to raise the maximum authorized power levels in the CBRS band, a request backed by the Competitive Carriers Association (CCA).

Dish argues that increasing the power levels for CBRS would increase the utility of the entire 3 GHz band, benefiting hundreds of smaller and rural entities that hold PAL licenses.

Among those currently opposed to higher CBRS power levels is T-Mobile, which argues that while Dish’s proposal may increase the utility of its 3 GHz spectrum holdings, it would do the opposite for the remainder of the 3 GHz band. That’s because the technical rules for the two adjacent bands – the already auctioned C-band and the 3.45-3.55 GHz band – were premised on the low-power use of the CBRS band.

In a report last year, New Street policy analyst Blair Levin said he believed the FCC will probably take a serious look at the CBRS power level issue, but that Dish has an uphill battle. If Dish were to win, the value of its CBRS portfolio would increase. If Dish loses on this point, the downside is basically zero, as it would simply keep in place existing power limits.

New Street also brings up another piece of spectrum: the L-Band, which is controlled by Ligado Networks. If Dish were to gain access to the L-band uplinks, it could effectively increase the size of its 3.45 GHz portfolio by 33% by increasing the share of spectrum that can be allocated to the downlink.

Another possibility is that AT&T and Dish’s 3.45 GHz holdings could be deployed jointly and shared since the holdings are largely adjacent. That looks more possible with the closer working relationship between the two companies since Dish struck an MVNO agreement with AT&T last summer. However, they also share, to put it mildly, a stormy history.  

Whatever Dish is up to, it’s unlikely to show its cards much. Dish delayed the commercial launch of its Las Vegas market, which was expected to happen last year. Although its service was said to be used by “friendly users,” which usually means employees or others on friendly terms where they can work out the kinks before a wider launch.

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