Dish fends off FCC with NB-IoT build-out, billed as 5G

Dish Network is to build a network based on the NB-IoT machine-to-machine technology, in order to fulfil FCC requirements to build out its spectrum. It is trying to bill its deployment as a 5G IoT system, and some commentators got excited about this being the first US 5G network from an operator with no existing cellular platform. In reality, though, it looks like a stopgap solution to give Dish breathing space to decide what to do with its airwaves, and perhaps to plot a real 5G strategy for the early 2020s.

After it acquired its first batch of spectrum, from two bankrupt mobile satellite operators, Dish was going to deploy LTE-Advanced. But it long ago realized it had missed the boat in building a mainstream LTE network in its patchwork quilt of spectrum, since it would have been so far behind the established MNOs, and it remains unclear whether it really wants to have its own national wireless network, or whether the spectrum is mainly a tradeable asset.

But either way, it has a dilemma now – if it delays too long in building out some of its airwaves, it will face confiscation or penalties from the FCC; but clearly any plan to deploy 5G at scale will need to wait until equipment and devices are readily available (Dish certainly won’t want to take the expensive route of deploying pre-standard or first-wave systems like AT&T and Verizon).

Hence the NB-IoT plan, which emerged in an FCC filing last week. The FCC conditions for allowing Dish to deploy terrestrial networks in former satellite spectrum include an interim deployment deadline this month, with a final deployment milestone in 2021. Alternatively, the FCC said Dish could miss the interim target but agree to an “accelerated final milestone” date of March 2020.

The satellite TV provider has gone for the second option and will start planning an NB-IoT roll-out, which it claims will be “5G-capable”. However, unless Dish sees its wireless activities as being commercially divorced from its core business, it will not see an M2M-only network as a long term solution. When it has discussed its wireless strategies over the years, it has focused on adding a mobile element to its TV services to support multiplay services; and more vaguely, the possibility of offering standalone wireless services on a retail, or more likely wholesale, basis. In all cases, it has been clear that it would require spectrum and/or infrastructure partners to make the economics of a national network add up – hence repeated speculation that it will merge with an MNO such as T-Mobile, and its own attempt to buy Sprint, which was scuppered by Softbank.

An NB-IoT network could support a wholesale business, enabling a wide range of vertical market, city or smart home providers (also an option for the cablecos – see separate item). But a network which does not support mobile broadband for the core customer base would be illogical, or would suggest Dish is just buying time from the FCC before selling its spectrum, once potential buyers start to look for airwaves for early 5G.

The cablecos themselves could be very interested in its spectrum, as the larger players, like Comcast and Charter, are getting back into the mobile game again, via MVNOs, WiFi and their own spectrum purchase. That process will accelerate with densification and 5G, because the cablecos believe they will be well positioned to provide small cell backhaul, Cloud-RAN fronthaul and converged fixed/mobile access by combining spectrum with their fiber footprint. Comcast Cable CEO Neil Smit told a recent conference: “Our overlay with the 5G overlay, the network similarities are just uncanny, and the ability of our network to service the 5G needs, we feel very confident with.”

For now, according to Dish’s filing, it is holding on to its spectrum and will use its airwaves in the AWS-4 and lower 700 MHz E-Block bands to construct its network. It claims it would not make “business sense to build out a 4G/LTE network now that would duplicate networks already offered by the wireless incumbents, and subsequently require an almost immediate upgrade in order to be competitive. Instead, Dish plans to deploy a 5G-capable network, focused on supporting IoT – the first to be deployed in these bands anywhere in the world.”

But in reality, it will be using firmly 4G technology, NB-IoT, which has many advantages as a holding pattern on the way to real 5G, or spectrum sale. One, of course, is that it requires minimal infrastructure. Most LPWAN applications have low data rates and do not require enormous data capacity, while the 700 MHz band supports long ranges and so requires a small number of base stations to cover a city or state.

Dish said it will continue to explore partnership opportunities, however, and is “open to exploring joint build partnerships” to reduce deployment costs.

Analyst Walter Piecyk of BTIG wrote in a client note: “Earlier this year we estimated that Comcast could build out a meaningful portion of its footprint for less than $2bn. An NB-IoT buildout on Dish’s licensed spectrum could cost a mere fraction of our Comcast estimate based on the feedback Dish received from an RFI (request for information) that was sent to dozens of vendors in late 2016. As Dish exits the quiet period of the FCC ongoing spectrum auction, which has prevented strategic discussions for 14 months, it could partner with an existing operator, tower company, cable operator or technology company to further reduce those initial build-out costs.”

On Dish’s most recent earnings call, chairman Charlie Ergen commented: “There’s going to be a really fundamental shift in wireless technology with 5G, and you’re reading a lot about it. Because it brings lower latency, a lot faster throughput, enables Internet of Things, in particular narrowband Internet of Things for massive internet activity. So in other words, we can build a network that’s completely an IP network, take advantage of all the 5G technologies, and also take advantage of the core, for example, so that, well, the smarts are in the cloud instead of being on the tower.”