Telecom & Wireless

Dish Network Goes After Another Helping of Wireless Spectrum

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Earlier this month, wireless network provider LightSquared Inc. received permission from the Federal Communications Commission (FCC) to use a band of wireless spectrum for a period of three months to test whether or not the company’s use of the spectrum would interfere with communications on a nearby government-dedicated band. LightSquared filed for Chapter 11 bankruptcy protection a year ago.

Today Dish Network Corp. (NASDAQ: DISH) offered $2 billion to purchase spectrum from LightSquared even though the spectrum has not yet been approved for use. The offer was reported by Bloomberg, which cited “people familiar with the matter.” The bid from Dish is a stalking-horse bid, which is routinely used in bankruptcy proceedings as a minimum price for an an asset.

LightSquared is controlled by Harbinger Capital Partners and its CEO, Phil Falcone, and has sunk more than $3 billion into developing the company’s 4G network. After testing in late 2011 and early 2012, traffic on LightSquared’s network was found to interfere with GPS systems. The company continues to try to find a work-around, but no progress has been announced.

Dish, which has countered Softbank’s bid for Sprint Nextel Corp. (NYSE: S), also has a bid in the works for Clearwire Corp. (NASDAQ: CLWR) in case it cannot prevail in its attempt to acquire Sprint. Dish seeks to add wireless spectrum in order to offer a package of services both for a customer’s home and mobile services. LightSquared’s spectrum holdings total nearly 60 MHz, a significant amount, but not in an easy-to-use location.

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