Former Chairman of DISH Network, DISH Network
DISH Wireless at NATE Unite 2022 - Charlie Ergen and Commissioner Carr Keynote Q&A
About Charlie Ergen
Charlie Ergen, chairman of Dish Network and EchoStar, discussed the companies' planned merger in August 2023, stating that the combination would allow them to "build a new athlete for telecom" and that "a lot has changed" since the companies were separated. Ergen said the deal would strengthen the combined entity's balance sheet and extend its financial runway, while acknowledging that more work on financing would be needed. He noted that Dish had spent approximately $30 billion on spectrum over the previous 15 years and described investing in the future as essential, saying "it's always a mistake for companies to not invest in the future because eventually that catches up with you." In earlier appearances, Ergen described Dish's commitment to building a greenfield 5G network, saying the company was "taking every single penny that DISH has ever earned" and investing it in wireless infrastructure. He characterized the effort as important for the country and said Dish aimed to be the first standalone 5G network outside of China. Ergen also expressed concerns about competition, describing T-Mobile's plan to shut down its CDMA network as "clearly an anti-competitive effort aimed at Dish" that would affect Boost Mobile customers. On workplace culture, Ergen told employees that Dish should be a meritocracy without discrimination based on sex, race, or background, and that the company's diversity helps it serve a diverse customer base.
Transcript (34 segments)
J
Jennifer Fritchey0:11
In the audience here today at the luncheon to give a warm and raucous NATE UNITE 2022 reception, and applause for our keynote Q&A. We've got Jennifer Fritchey, who's going to moderate, from Green Hill and Company. We've got DISH Chairman and Co-Founder Charlie Ergen and FCC Commissioner Brendan Carr. Let's give them a warm NATE UNITE 2022 welcome.
We've come through two big spectrum auctions, actually three with CBRS, big spectrum auctions. All of which you've participated. You spent billions of dollars in spectrum. Can you... and there's been some doubt in DC that you would probably do what you said you're going to do.
C
Charlie Ergen1:10
Come here and echo a little bit of what the Commissioner said about appreciating the hard work that's done. We know at DISH that sitting in an office doesn't get things done. It's out in the field. We knew 15 or 16 years ago that our traditional satellite TV business was going to face competition. When we first saw broadband and started seeing video potential in the lab, we knew what was going to be the next thing. Our vision as a company was to change the way the world communicates. In that sense, we started accumulating spectrum. We spent $30 billion on spectrum over the last 15 years. Some money we had, every penny we had, and a bunch of money that we didn't have that we would have to pay back at some point in time.
A network, with Las Vegas being our first big city that we're going to launch. It really is the fact that we're putting the network in the cloud. The entire network runs on the cloud, not at the base of the tower, not in a switch. We also use open RAN technology, open RAN where we break apart the monopoly of the radio and the baseband. We're building a standalone network, so it's all 5G, not 4G, 3G, or 2G. Two years ago when we were in Raleigh, we hadn't built a tower.
We can't commercially launch yet. We still need to get through E911 system, which has turned out to be a little harder than we thought. We have a commitment to the FCC that we're going to have 20% of the population deployed by June of this year, and we're on track to do that. It was heartwarming. I've had a few days in my life I'll always remember. One was last night, 2/22/22. The only shame was it wasn't 2 o'clock in the afternoon. I got to experience the networking operation that really is different. This isn't technology being done in a lab; this is real.
We have support, and Commissioner being one of those that has supported us and given us a chance. I'm not saying everybody thinks we're going to be successful, but whether it be regulators, Congress, bankers, or our investors, they've given us the benefit of the doubt. It's our job to take that confidence. When people have confidence in you, you can do great things, and I think that's what you're going to see from DISH. The concerns that you were going to be a spectrum warehouse or a holder of spectrum, from what I'm hearing you say, that seems way off target. We had a chance to sell the $30 billion for a lot more than $30 billion.
When you can get passionate about something, the rest of it kind of falls to the wayside. We're trying to build a better network than our competitors in the United States. We're going to step beyond that and build a network that's better than anybody else's in the world. People will catch up, and maybe if we sleep at the wheel, they'll surpass us, but the network that's here today is the only network in the world that's in the cloud, the only network that's a totally O-RAN network, the only network that uses VoNR for voice, the only network that uses open RAN technology and cloud-based architecture. It's cloud-native. That just doesn't exist. A lot of people who are incumbents don't think that's the way things are supposed to go, but we have a different opinion.
J
Jennifer Fritchey6:11
Commissioner Carr, I think the FCC has done an enormous amount in the last 15 months: CBRS, 108, excuse me, 107, 110. What are plans for more?
B
Brendan Carr6:21
Yeah, I think there's still some low-hanging fruit out there. If you look at the timeline for taking action at the FCC on spectrum, and actually hitting the towers, there's a pretty good lag time. We were really behind for quite a while, but in 2016, 2017, 2018, we started ramping up. Now you're seeing that spectrum. We did all the work needed to get the 3.45 GHz auction done, and we were able to hold that. Next up, everyone assumes there's going to be an auction of 2.5 GHz spectrum. Knock on wood, we get an announcement soon. About a year ago, I laid out a spectrum calendar.
In terms of timing, I think we need to take a look at upping the power levels, for instance in the 3.5 GHz band, the CBRS band. Right now it's basically Wi-Fi power levels, which is great, but simply by turning the power up a little higher in that existing spectrum band, you can get more coverage and more capacity. I think that would be a good thing we can do. There's another UNII-2C Wi-Fi band that I identified where we could start a proceeding at the FCC. It's a mixed bag. We've basically been following through on the tough decisions we made during the last administration. C-band was an auction we completed, 3.45 GHz was an auction we completed. These are all good things, but if we're going to extend US leadership, we've got to start breaking new ground with new spectrum bands. I'm a little worried that we're slipping into a bit of a spectrum complacency.
J
Jennifer Fritchey8:10
You've put a lot of money into spectrum, built out, which brings me back to Charlie. Obviously you've accumulated a ton of spectrum. Two questions on that. The 3.5 you just bought, I think a lot of people were surprised how much you paid or how much you spent, but at a very good price. When you pair that with CBRS, it's actually even more powerful. Is that right?
C
Charlie Ergen8:38
Yeah, so two things. One, in the lower Hague freedom, I echo the Commissioner's comment about CBRS in terms of power levels. The 3.5, the C-band spectrum around the world, we have to compete as a country with everybody else. That's a uniform band at a certain power level.
That's AWS spectrum, which we use for DBS and satellite. But we've done enough testing, and we bought at auction the terrestrial rights for about 70% of the country. Other people own the rest. We know we can use that terrestrially without interfering with the satellites. That's another place we don't have to ask the Department of Defense or go to Congress. The FCC is looking at that today. As far as the C-band auction, one of the things we're big believers in, and this is something the audience should think about, is private networks. Companies are going to want their own networks. When you put the network in the cloud, it gives you the ability to slice the network and automate it so companies can have their own secure, dedicated networks.
CBRS is where a lot of people will start because it's free. A lot of the GAA spectrum there is free, so people will start there, and then we think they'll add adjacent to that with C-band. That's why we spent extra money to get it adjacent to C-band. We're interleaving, we're on both sides, right in the middle of where we think private networks are going to be. Everybody building a private network will need someone experienced in building that out, like on a college campus, and maintaining it. That's going to be big growth for all the wireless carriers, and certainly it's a place where DISH is focused.
The other piece that probably doesn't affect so many is satellite. Whether it's for backhaul, connectivity to a phone, IoT, or a business where you're geographically too remote. Those are things we're working on.
J
Jennifer Fritchey11:23
Just a secure question for both of you. Obviously it's a very competitive industry with two or three giants. As you look at your whiteboard plan, are you going after the consumer like me, or you mentioned private networks? I'm curious, as you look at the market, what is left untapped? What will be DISH's differentiation? Commissioner, I'll bring you in. How does DC view that role?
C
Charlie Ergen11:52
Well, the obvious place is consumers. I hope everybody in this room... we certainly, as you know, most fourth players around the world get low double-digit market share. That's still 40 or 50 million potential subscribers for us. That's still a good business. But the thing that excites us is we can take advantage of the cloud and do things our competition can't do as easily. That's going to help companies build safer, less expensive products because they have data on their products. It'll open new opportunities for them. The key is to use that tower pumping out spectrum more efficiently. We don't have all the answers. We never have as a company. Every day we come in looking for solutions. We're confident as entrepreneurs that we can figure out ways to do that.
J
Jennifer Fritchey13:24
Commissioner, how does DC view the new entrant? I think DISH was a linchpin in getting T-Mobile and Sprint approved. They're clearly important, but how do you view the competitive landscape? Do you feel like we're on the cusp of significant change?
B
Brendan Carr13:39
Yeah, I mean, look, we want more choice and more competition. I think the stuff DISH is doing is great. They're building out, and we're excited to see where that goes. I think we're at an interesting point in time in DC. We've talked about 5G in DC for three, four, or five years, and now we're actually seeing real use cases emerge.
One is in-home broadband. A lot of companies are using all this excess spectrum and supply to go after the in-home broadband market, where consumers felt they had only one choice or no choice for high-speed service, principally a wired connection. We see a lot of early 5G use cases taking market share in the fixed wireless space. We'll see if that continues, if there's a competitive response, if in-home demand for data exceeds fixed wireless. Right now we're seeing a lot of uptake. Again, the cell phone is an interesting piece of 5G, but it's not the whole thing. The 4G network was custom-built for cell phones and the app economy. It's still early days. We have this whole new generation of innovations we're expecting to see.
Look, there's still more we need to do to make it easier to build. We did a lot in the last couple of years on infrastructure reform. Right now we have an unprecedented amount of dollars coming out of DC for infrastructure builds, and it's not tightly coupled with reforms and red tape cutting. My concern is we're putting our foot on the gas and the brakes at the same time. If we're not streamlining where these dollars go, we'll waste some of them. That's a challenge. We've never been in a situation where we have enough federal funding to end the digital divide. We now do. Some estimates say we need about $80 billion. But look at all the agencies that have gotten money over the last year and a half. It's something like $800 billion that could go to broadband infrastructure. So arguably, if 10 times the money is available, there's a risk of waste.
Second, we need to get them up to speed. Some in DC want to gold-plate existing services or give people gig service who already have 90 or 99 Mbps speed. My view is that's great in the long run, but let's leave the people with near 100 Mbps right now and focus those infrastructure dollars on the truly unserved communities. I think we're hopefully trending in the right direction, but it's still to be determined.
J
Jennifer Fritchey16:39
Even looking at the competition, there are obviously the four, including DISH, but others are entering the conversation: Microsoft, Amazon, the cloud players. They're maybe not so sneakily creeping into wireless, even though they don't own spectrum. Charlie, you have a unique perspective on that.
C
Charlie Ergen17:10
They have sales forces, they're already in all the enterprise, they're in the Fortune 500 companies. They already have relationships with the CIOs. They're already customers. What they don't have is the bandwidth and spectrum to do it. They can use unlicensed spectrum, but ultimately companies are going to need more. They need security. Most networks today weren't architected for the kind of security businesses need. I think they open a lot of doors for us. Every time they go in, we benefit. We can't sell to every Fortune 500 company; we're not staffed for that. But they are. I see that as a positive for where we're going. It's certainly potentially a threat, but we'll see.
J
Jennifer Fritchey18:11
You know a little better that has to compete against that, yeah. But couldn't they without spectrum? I mean, they can use unlicensed products. You can get pretty far, right?
C
Charlie Ergen18:27
Yeah. My theory is, you give someone a bite of cake, they want a piece of cake. Then my grandson wants the whole cake. The same thing will happen with spectrum. They'll give people a bite of the cake, and companies will see how it changes their business and their return on investment. They'll want the piece of cake, and that's us.
J
Jennifer Fritchey19:11
On the E911 point, we said February 20-something. Are you feeling more like the things you need to do are within your control to get to that point?
C
Charlie Ergen19:19
Well, the E911 is only indirectly in our control because we have a third-party vendor that has to do that. They work with the other carriers, so it's a whole database. The other carriers have to cooperate too. They've got to add all our data in and shut theirs down during the maintenance window. They have to plan for that, and then we have to test it. This isn't something that will take many months, but we wish we were at that point yet. Most things, even if they're not under control, I try to think of it as being in our control. The thing that worries me is financial markets, things truly not in our control, like regulatory issues, like the C-band situation with AT&T and Verizon. Those things can throw you for a loop no matter how well you did everything else. But when it comes to climbing towers, building a great network, making sure it works, and competing for customers, that's totally in our control. With the help of people in this room and many others, we'll get there.
J
Jennifer Fritchey21:10
Commissioner, I'll ask that of you. If there were doubters of DISH 15 months or two years ago, do you feel those doubts are waning based on what you're seeing in the market today?
B
Brendan Carr21:19
Yeah, look, I think what Charlie's doing, the sites they took me to today, the speeds and coverage they're getting, I think it's great progress. I think that'll go a long way to giving people confidence that DISH is on track to meet all their build-out obligations. If you step back, we're seeing a level of competition in wireless right now that I don't think we've seen in a long, long time. When we approved the Sprint-T-Mobile combination, one theory was it would supercharge competition. While there were doubters of that deal, we've seen exactly that. Prices for consumers continue to drop. We're seeing lots of competition.
It's everything from non-telecom-specific stuff like pickup trucks for the crews, there's a shortage there, chips for the work, pedestals, fiber has a bit of a lag time. Some companies are seeing 50, 60, 70-week lag times. Workforce has always been a challenge in this industry, and given the broader economy right now, that's also a challenge. The industry isn't immune to inflation, supply chain, and workforce challenges, but we're working through it. We're seeing a level of competition we've never seen before. Prices for consumers are dropping at a time when prices for everything else are skyrocketing.
J
Jennifer Fritchey22:51
And including spectrum. Do you worry about that? How does Verizon and others pay for all this?
B
Brendan Carr23:10
Most quickly, that's the idea of an auction mechanism. Putting up a huge number is not anyone's goal. The fact we raised $80 billion for C-band doesn't move the needle. It's not like you put a plaque up in your house as a regulator when the government made $80 billion, and you don't get a cut of it. But there is a sweet spot. You don't want people spending so much on spectrum that it takes away from the actual build, paying tower climbers, etc. It's a great way to ferret out who will build and who won't. We have to strike a balance. It's not great to have massive spectrum auctions that pull money out of the market and stick it in the treasury.
J
Jennifer Fritchey23:47
I want to thank you both for doing this. Nice to meet you, Charlie, and great to see you, Commissioner. Thank you all, and thank you for all the work you're doing.