Regulators’ Sucker Punch on Ergen’s DISH Sends a Bad Message

DISH Founder and Chairman Charlie Ergen should be fuming at the Feds right about now. His ideas were in the right place – a little bit of laissez faire common sense from regulators and his acquisition of a dying Blockbuster turns into healthy competition in the OTT video market. Instead, regulators denied DISH’s waiver to use its satellite spectrum for terrestrial use. So, Netflix stays ahead of the pack a bit longer. Verizon gets ready to launch with RedBox. And DISH is trying to figure out what to do with a Blockbuster chain it can profit from by simply pulling the plug on it. This makes no sense.

All of the complex legal and technical mumbo jumbo aside, what regulators have done to DISH is anti-competitive. DISH was trying to do something innovative that we haven’t seen other players in the Pay TV space do; launch a true Netflix competitor. That would be good for consumers. It would help encourage operators to see that they could compete for customers beyond their network footprint; that’s the beauty of an open OTT model. Further, a pro-DISH decision would send the message that regulators a) want to see healthy competition in the US digital content market, and b) are willing to rethink old regulatory approaches to make broadband- and mobile-dependent business models flourish. That message encourages further investment that benefits innovators up and down the food chain (i.e. it’s easier to raise venture capital in a regulatory-friendly environment that says “we don’t want to repeat the mistakes we made when we killed loop unbundling and thus the dot-com bubble”).

Instead – and particularly in the wake of the FCC’s knockout cheap shot on LightSquared’s chin  – it sends the signal that all of this nonsense about wireless broadband investment in the US is just that – nonsense. The Feds can give all the grants they want to help get 4G to places where no one lives. They should be focused on letting people like Charlie Ergen build services that help fuel demand for broadband while using finite spectrum in creative ways. Ergen was willing to do it with his own – not taxpayers’ – money, and the Feds told him “No.”

The thing is, Ergen still has the coin, and now he has reasons to invest it creating jobs and infrastructure outside of the US.

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About Edward Finegold 122 Articles
Ed is now Director, Strategy for NetCracker. Previously, for 15 years he was a reporter, analyst and consultant focused on the OSS/BSS industry and a regular contributor to BillingViews.

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