FCC angers small carriers by helping AT&T and Starlink buy Echo Star spectrum - Ars Technica
Overview
FCC angers small carriers by helping AT&T and Starlink buy Echo Star spectrum
Approval is no surprise after FCC chair pressured Echo Star to sell licenses.
Details
The Federal Communications Commission yesterday approved Echo Star’s sales of spectrum licenses to AT&T and Starlink operator Space X. The deals are worth $40 billion in total.
The orders, issued by the agency’s Wireless Telecommunications Bureau and Space Bureau, aren’t surprising given that FCC Chairman Brendan Carr essentially forced Echo Star to sell the licenses. Last year, Carr threatened to revoke the licenses after Space X alleged that Echo Star subsidiary Dish Network “barely uses” the spectrum to provide mobile service to US consumers.
Dish had obtained a deadline extension for its network deployment obligations from the Biden-era FCC, and Carr objected to the agreement made with the previous administration. After Carr’s threat, the Charlie Ergen-led Echo Star struck deals to sell spectrum licenses to Space X for
AT&T is set to acquire 30 MHz of nationwide spectrum licenses in the 3.45 GHz band and 20 MHz in the 600 MHz band, giving it new options for both mid-band and low-band spectrum in its 5G and fixed wireless networks. Space X is buying 65 MHz of nationwide spectrum licenses in a few chunks between 1.695 GHz and 2.2 GHz, which it can use to boost the Starlink satellite mobile service that is available for T-Mobile phones.
The deals may still have a problem despite yesterday’s approvals. Echo Star objected to an FCC-imposed condition requiring it to fund an escrow account of $2.4 billion to compensate construction companies that were hired to build the Dish network.
Echo Star’s Boost Mobile subsidiary will continue to provide wireless service, but over the AT&T network rather than Echo Star’s own. Boost Mobile will also have access to Starlink’s mobile network through a deal with Space X. Echo Star, which has said it had to scale back its network-construction plans to resolve the FCC’s complaint, issued a statement yesterday suggesting it may fight the escrow requirement.
Separately, a group representing rural mobile carriers criticized the approvals, saying the FCC ignored competition concerns raised by small wireless operators. The spectrum sales “continue the troubling pattern of spectrum aggregation that disadvantages rural wireless providers, stifles competition in the wireless marketplace, and hinders the deployment of wireless services—particularly in the hardest-to-serve rural areas,” the Rural Wireless Association said.
While Starlink isn’t a wireless carrier, it is looking to dominate the emerging market for Direct-to-Device (D2D) systems that use low Earth orbit satellites to provide service on standard mobile phones. Meanwhile, AT&T’s purchase of Echo Star licenses continues the consolidation of spectrum with the three major carriers—AT&T, Verizon, and T-Mobile.
“In approving the Echo Star/AT&T deal, the FCC’s Wireless Telecommunications Bureau erroneously asserts that the likelihood of competitive harm is low, dismissing concrete harms identified by rural wireless carriers, including reduced access to spectrum needed to expand service in rural markets and diminished competitive opportunities for rural and regional wireless providers,” the Rural Wireless Association said.
Although the Rural Wireless Association objected to the approvals, it said there is still a chance for small carriers to get some spectrum licenses from Echo Star in future deals.
FCC chair says it’s all “thanks to President Trump”
While the approvals came from FCC staff, Carr announced the decisions in a press release. He also gave credit to his boss in the White House.
“Thanks to President Trump, America is leading the world again in next-gen technology,” Carr said in his official statement on the approvals. “As a result of President Trump’s work, Americans are now going to see faster Internet speeds, stronger competition, and innovative new offerings, including high-speed connections right to your smartphone from space—providing ubiquitous connectivity when these new systems are complete.”
AT&T previously received special authority to deploy Echo Star’s 3.45 GHz spectrum while the sale is pending. AT&T said yesterday that it has deployed the mid‑band spectrum to boost network capacity, and will deploy the low-band frequencies after closing the purchase. AT&T has said it expects to complete the deal in mid-2026.
Echo Star’s deal with Space X will be completed in two stages, with the licenses being transferred first to a trust held for the benefit of Space X and later from that trust to Space X. The companies say the two-step process is necessary to obtain regulatory approvals outside the US. The final step is expected to be completed by November 30, 2027, but could happen earlier.
Echo Star opposes “unprecedented” escrow condition
Echo Star said it is “evaluating next steps” in regard to the escrow condition. That kind of statement can indicate a company is considering legal action.
“The FCC has continuously applauded Echo Star’s spectrum sales to AT&T and Space X as pro-competitive transactions that serve the public interest, and we appreciate that the FCC approved them today,” Echo Star said. “However, these approvals come with an unprecedented involuntary escrow condition. We are analyzing this requirement and evaluating next steps.”
The FCC said the docket drew comments “alleg[ing] that Echo Star has told various tower companies, fiber backhaul providers, and construction firms that it will not fulfill its contracts nor pay the monies it owes them for constructing that radio network.” The companies asked the FCC to impose an escrow requirement so they can be paid from the proceeds of the spectrum sales.
“Echo Star disputes claims that have been raised by those companies,” and “responds that it has reached settlements with hundreds of vendors and made hundreds of millions of dollars of payments,” the FCC said. “It argues that any escrow condition is illegal and unmanageable.”
Despite acknowledging those objections, the agency ordered Echo Star to put $2.4 billion in an escrow account, which would be withdrawn based on the outcome of legal disputes with vendors. The FCC acknowledged that the agency itself played a “unique role in the underlying series of events,” creating “a precedentially novel fact pattern and cognizable public-interest harms specific to this transaction that we find necessary to resolve here.”
“With the attached condition, the FCC continues to allow the relevant parties and, if necessary, courts or other bodies, to adjudicate or settle these issues,” the FCC said.
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Key Takeaways
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FCC angers small carriers by helping AT&T and Starlink buy Echo Star spectrum
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Approval is no surprise after FCC chair pressured Echo Star to sell licenses
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The Federal Communications Commission yesterday approved Echo Star’s sales of spectrum licenses to AT&T and Starlink operator Space X
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The orders, issued by the agency’s Wireless Telecommunications Bureau and Space Bureau, aren’t surprising given that FCC Chairman Brendan Carr essentially forced Echo Star to sell the licenses
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Dish had obtained a deadline extension for its network deployment obligations from the Biden-era FCC, and Carr objected to the agreement made with the previous administration
