Spectrum Auction Serves Up Dish

Telecom companies bidding for wireless airwaves may be inadvertently bidding up the stock of Dish Network.

Proceeds for the continuing government auction of wireless spectrum have swept past expectations, totaling $36 billion -- more than double analysts’ estimates -- in just the first eight days. The numbers suggest Verizon Communications , AT&T and to a lesser extent T-Mobile US , which are together expected to win the vast majority of the spectrum, are spending more aggressively than many anticipated. In doing so, they are driving up the implied valuation of spectrum already held by Dish. Indeed, Dish shares have risen 19% since the auction began Nov. 13. Chairman Charlie Ergen all but set the stage for this, suggesting on an August call that the price achieved in the auction would create a new way to value Dish’s considerable spectrum holdings.