Key Points
- Echostar told the FCC it felt pressured to sell wireless spectrum to AT&T and SpaceX after Chairman Brendan Carr criticized the company’s slow progress on building a fourth national network.
- Executives said they abandoned plans to expand facilities-based wireless service over concerns the FCC could investigate or confiscate spectrum assets.
- The AT&T deal values the licenses at $23 billion; the AT&T and SpaceX transactions are expected to close in 2026.
Executives at Echostar this week told the Federal Communications Commission (FCC) it never wanted to sell its wireless spectrum to AT&T and SpaceX, but felt it was forced to do so because FCC Chairman Brendan Carr was displeased with the company’s progress on the developing of a fourth consumer wireless network.
The comments were made during a December 1 meeting with Carr, according to a letter filed with the FCC on Wednesday, a copy of which was obtained and reviewed by The Desk.
In the letter, Echostar’s Executive Vice President of Government Affairs Jeffrey Blum confirmed the company expressed to Carr that it ” did not plan to sell its mobile wireless spectrum, but is doing so now given the agency’s unequivocal position that Echostar’s utilization of the spectrum was not acceptable,” given the company’s few wireless subscribers.
Echostar has amassed wireless spectrum for more than two decades, and a separate transaction involving the combination of T-Mobile and Sprint in 2020 was approved by regulators on condition that the companies spin out and sell off Sprint’s prepaid brand Boost Mobile. Echostar acquired Boost Mobile and its spectrum-related assets that same year, with the promise that Dish would develop and market a new wireless company that would compete with T-Mobile, AT&T and Verizon.
Dish continued to sell service through the Boost Mobile brand while building out Dish Wireless, which reaches large parts of the country. But the business has not generated the type of momentum that regulators were hoping for. Earlier this year, Carr accused Dish of “warehousing” wireless spectrum, and suggested the agency might for a sale of its license or otherwise confiscate them.
“Due to severe uncertainty as to whether Echostar could recoup its multi-billion dollar investments following potential Commission investigations and forfeitures, Echostar had to abandon its plans to grow its facilities-based (mobile network) operations,” Blum wrote.
To satisfy Carr’s concerns, Echostar decided to enter into an agreement to sell a sizable chunk of its spectrum to AT&T, with the licenses valued at $23 billion. The FCC is required to approve the deal, and the companies believe the transaction will close in 2026. Earlier this week, AT&T informed the FCC that it was ending its diversity and equity programs — an apparent attempt to appease Carr, who has criticized those initiatives in the past, in order to gain regulatory approval for the Echostar deal.
The deal with SpaceX will also involve the sale of wireless spectrum and includes a plan to launch a direct-to-consumer service that will elevate the experience of Boost Mobile subscribers, which will make that brand more-compelling, Blum said.
“This hybrid (mobile network) business model will not just benefit EchoStar’s own customers, but it will also put pressure on all wireless providers to up their game, thereby benefiting consumers generally,” he promised.
