Current FCC rules require operators using satellite spectrum to offer handsets with a satellite chip, making the devices more expensive. Dish has been awaiting the FCC's decision on whether to allow the satellite operator to use its spectrum for a solely ground-based cellular network.
The Wall Street Journal reported Friday that the FCC is close to approving Dish's request, but with a buffer zone in which Mr. Ergen could only operate at low power, which could mean worse wireless service. Mr. Ergen said that limit would reduce the capability of Dish's "uplink" spectrum—which handles the pathway from the cellphone to the tower—by 25%. An additional 25% on top of that would be impaired due to interference, he said, endangering Dish's ability to compete in the wireless business against incumbents like AT&T Inc. T +1.89% and Verizon Wireless, which own much larger swaths of spectrum.
The reclusive satellite-TV pioneer has spent a large amount of time this year in the public eye attempting to convince Washington that he is serious about entering the wireless business, even as analysts speculated that Dish may simply try to sell the spectrum at a big profit.
Mr. Ergen's offer to buy MetroPCS came to light through a MetroPCS filing to the Securities and Exchange Commission late Friday.
