Why Is DISH So Hungry For Broadband?
Satellite TV subscribers aren't necessarily shut out of broadband Internet services. DISH Network (NAS: DISH) partners with local telecoms and cable providers across the country to get you hooked up. Dish even sells satellite-based broadband bouncing off ViaSat (NAS: VSAT) satellites. Rival DirecTV offers similar partner services, right down to its own ViaSat deal..
But that's not good enough for Dish CEO Charlie Ergen. Sister company EchoStar (NAS: SATS) launched another satellite two months ago, meant to provide high-speed satellite Internet services on a whole new performance level. According to The Wall Street Journal's usual anonymous sources, Dish plans to sell high-speed services off this big bird by the end of the year.
But that's not Dish's only iron in the broadband fires. Ergen also wants to start a wireless high-speed network based on radio towers, using satellite-grade bandwidth licenses. That move requires approval from the FCC, which previously shut down a similar plan from erstwhile Sprint Nextel (NYS: S) data partner LightSquared.
Dish runs the risk that regulators will stick to their guns, in which case, these radio licenses would have to be used for satellite-based signals after all. I'm sure Ergen has a plan B for that contingency, but would prefer to have a more responsive earth-bound product in his back pocket.
I have a bullish CAPScall riding on Ergen's broadband plans. If he can pull off this complicated design, we'd eventually get an Internet-based satellite TV service that's capable of streaming content and entertainment in a whole new format. This would be real competition for Netflix (NAS: NFLX) in the long run, and a tempting alternative to cable, even for city-dwellers. There's nothing like it today, which is why Netflix can lay waste to the cable guys all by itself.
But the whole thing depends on getting that final FCC approval for tower-based networking. Until we figure out how to send data faster than the speed of light, there will always be things you just can't do with slightly laggy satellite connections.
The good news is that, while they're waiting for FCC approval, you can be making money other ways. One opportunity might be Netflix, which has been punished by investors, but still presents some compelling opportunities with its aggressive international expansion. To learn more about these opportunities, as well as the key pitfalls facing Netflix, take a look at our brand new premium report on the company. It comes with a full year of updates, as well, so make sure to click here to claim your copy today.
The article Why Is DISH So Hungry For Broadband? originally appeared on Fool.com.Fool contributorAnders Bylundowns shares in Netflix and has created a bull call spread on top of those shares, but he holds no other position in any of the companies mentioned. Check outAnders' holdings and bio, or follow him onTwitterandGoogle+. The Motley Fool owns shares of Netflix.Motley Fool newsletter serviceshave recommended buying shares of Netflix. The Motley Fool has adisclosure policy. We Fools may not all hold the same opinion, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter servicesfree for 30 days.
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