Eight years after buying them, Cablevision Systems has sold its wireless spectrum holdings to Dish Network -- raising questions about the long-term future of OMGFast, the unit the MSO set up to deliver 50-Mbps wireless broadband service in South Florida.
The cable company is selling its Multichannel Video Data Distribution Service (MVDDS) fixed wireless spectrum licenses, covering 45 markets in the U.S., to Dish for $80 million as part of the settlement between AMC/Cablevision and Dish announced Sunday.
However, “OMGFast continues to have rights to the spectrum they are currently licensing,” a Cablevision spokeswoman said. She could not provide details on how long OMGFast would be able to use the spectrum.
Earlier this year, OMGFast launched a 50-Mbps service for $29.95 per month to residents in Broward County, Fla., competing with wireline broadband providers in the area including Comcast.
But Cablevision has described the OMGFast service as a “trial” and says there are no plans to launch it anywhere else. The company has not disclosed how many subscribers have signed up for OMGFast.
Sanford Bernstein senior analyst Craig Moffett wrote in a report Monday that “our sense has been that the project was intended to meet minimum buildout requirements [from the FCC] associated with the licenses, and did not signal an intent to overbuild its cable peers.” The MVDDS licenses, which Cablevision acquired in a 2004 FCC auction through its DTV Norwich subsidiary, require that "substantial service" be provided by September 2014.
For Dish, the deal would give it MVDDS licenses covering 80% of the nation's population, and virtually all of its urban areas, according to Moffett. Note that the FCC must still approve the MVDDS license transfer.
While MVDDS was envisioned as enabling video as well as data, Dish will likely use the spectrum (in the 12.2 to 12.7 GHz band) for microwave backhaul to connect cell sites to the core network in urban areas, Moffett speculated.
Cablevision declined to comment on Moffett’s suggestion that OMGFast was aimed at meeting buildout milestones.
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