Questions on Spectrum Animate T-Mobile-Dish Merger Talks

At the center of the merger talks between T-Mobile and Dish Networks is the value of spectrum, the airwaves that carry communications signals.

Different types of spectrum — ranging in frequency from low to high — are suited to different uses; the type that carries mobile phone communications most reliably, known as low-frequency spectrum, can travel far and through buildings and trees. In the wireless industry, three-quarters of low-frequency spectrum is in the hands of AT&T and Verizon, giving those companies a major competitive advantage and leaving T-Mobile, Sprint and other smaller phone carriers struggling to deliver reliable service and expand their networks. Recognizing that, the federal government is seeking to redistribute low-frequency spectrum from local TV stations — who claimed significant swaths of that desirable spectrum in the days before cellphones existed — to wireless phone carriers. The Federal Communications Commission is planning to buy spectrum from TV stations and auction it off to phone carriers, a complicated exchange that is expected early in 2016.

The questions surrounding the auction may be partly motivating T-Mobile to engage in merger negotiations. Dish Network has amassed a large amount of spectrum in recent years, to the puzzlement of many in the industry, with analysts left wondering what the satellite provider’s plan for that resource was.