By DANNY YADRON
April 15, 2013 Wall Street Journal - WASHINGTON—Should satellite-TV provider Dish Network Corp. DISH -0.25% prevail in its bid for Sprint Nextel Corp., S -0.14% federal regulators would likely give a green light to the merger, industry officials and analysts said, even though the new company would become the leading holder of valuable airwaves among U.S. wireless carriers.
Regulators have been wary of letting wireless-market leaders AT&T Inc. T +0.30% and Verizon Communications Inc. VZ -0.01% control too much of the nation's airwaves, or spectrum, part of an effort to spur competition among national carriers.
But the government is unlikely to subject Dish to the same scrutiny if it pulls off its unsolicited bid for Sprint announced Monday, according to industry officials and analysts. That's because AT&T and Verizon would still control much of the country's most-valuable airwaves in the lower-frequency range, they said.
Dish Chairman Charlie Ergen's main advantage in the reckoning: As of now, he doesn't have any wireless subscribers.
"Regulators in recent years have rightly shown they are willing to let smaller market players consolidate in order to be an effective challenge against the very, very powerful players at the top of the market," said S. Derek Turner, research director at the consumer advocacy group Free Press.
Susan Crawford, a former White House adviser on technology issues, also suggested the Federal Communications Commission and Justice Department, which weigh the antitrust implications of proposed mergers, wouldn't object to Mr. Ergen acquiring Sprint.
The Obama administration has "been pushing for more competition in the wireless space and for carriers other than the Big Two to get access to spectrum," Ms. Crawford said in an interview Monday.
Regulators soon are expected to approve Sprint's acquisition of Clearwire Corp., CLWR +0.03% another wireless company with large spectrum holdings. Dish recently won control of a coveted swath of airwaves after an FCC lobbying battle with Sprint.
The combined Dish-Sprint-Clearwire would control about twice as much airspace as either Verizon or AT&T, said Roger Entner, an analyst at Recon Analytics LLC.
The Justice Department on Friday urged the FCC to assign a higher value to lower-frequency spectrum and to ensure smaller carriers gain access to it.
Mr. Ergen's proposed merger automatically would draw some scrutiny from the FCC because of the sheer amount of airwaves he would control. But regulators, at most, would force him to sell off some spectrum holdings, analysts said, rather than rejecting the deal.
"You would probably have a lot of concerns about someone buying up all the spectrum that's left in the market," Mr. Entner said.
An FCC spokesman declined to comment on the Dish proposal.
On Friday, Mr. Ergen visited the commission and expressed concerns about the amount of airwaves that would be owned by Japanese wireless provider Softbank 9984.TO +0.45% Corp if it were to succeed in its bid to acquire the combined Sprint and Clearwire, according to FCC filings.
During the meetings, he made no mention of his plans to announce a bid Monday for the same airwaves, people familiar with the matter said.