MERIDIAN (dpa-AFX) - Charlie Ergen, chairman of satellite television provider Dish Network Corp. (DISH), has made a $2 billion bid for radio frequencies used for wireless communications from bankrupt wireless broadband company LightSquared Inc., Bloomberg reported Monday.
Ergen reportedly made the offer on May 15 to buy the so-called L-band spectrum from LightSquared, owned by Philip Falcone's hedge fund company Harbinger Capital Partners LLC, even though the Federal Communications Commission or FCC has yet to approve its use. LightSquared has time until May 31 to accept or reject Ergen's bid.
Spectrum is the limited pockets of airwaves that are needed by telecommunications companies to operate wireless networks.
LightSquared filed for bankruptcy last year after regulators blocked approval to build the company's network on concerns that it would interfere with global positioning systems or GPS.
The LightSquared deal is expected to help Dish expand its wireless assets even as it seeks to acquire Sprint Nextel Corp. (S) for $25.5 billion. Dish expects that an acquisition of Sprint Nextel could create an industry-leading spectrum portfolio and make it the only company to offer a fully-integrated, nationwide bundle of in- and out-of-home video, broadband and voice services.
Dish has spent more than $3 billion to acquire wireless spectrum in order to build a wireless U.S. cellular network that could compete in a market dominated by Verizon Wireless (VZ) and AT&T Inc. (T). Sprint is credited with introducing the first wireless 4G service from a carrier in the U.S.
In 2011, Sprint reached an agreement with LightSquared that gave Sprint the option to buy network capacity from LightSquared. But that contract was terminated by Sprint in 2012 amid concerns that signals over that the spectrum interfered with GPS systems. LightSquared filed for bankruptcy protection two months later.
Ergen's bid for the spectrum is said to be a stalking-horse bid used in bankruptcy proceedings to establish a minimum price for an asset sale. The stalking-horse bid would have to be approved by the judge before being used to open an auction.
DISH closed Monday's regular trading session at $38.70, down $0.29 or 0.74 percent on a volume of 3.05 million shares.
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