FCC’s Challenge to SATS’ Spectrum: More Complex Than It Seems
FCC’s challenge to SATS’ spectrum is multi-faceted and more complicated than initially meets the eye. They are not simple issues to resolve and might show holes in SATS’ spectrum rights that would make creditors concerned. Below is my current read of the situation. I’m not a spectrum expert, just a “reader of english”.
FCC opened two dockets:
1) Docket (22-212): FCC is reviewing the 2024 extension granted to DISH’s 5G network buildout.
The initial 2019 buildout agreement with the FCC required DISH to provide coverage to 70% of the population for AWS-4 and 700 MHz licenses and 75% coverage for H-Block and 600 MHz licenses by June 2025. The penalty for noncompliance is the revocation of licenses and financial penalties. In 2024, DISH requested and received an extension from the Wireless Bureau that pushed out the compliance date to December 2026, with a further extension to June 2028, conditional upon meeting public interest commitments such as:
Achieve 80% population coverage with Boost Mobile by December 2024 and accelerate and expand milestones for over 500 licenses,
Deploy 24K towers by June 2025,
Offer $25/30GB low-cost plan, and
Provide spectrum-leasing access to Tribal and small carriers.
Carr’s exact words in his 5/9/25 letter to SATS were: “Rather than abiding by the terms of that 2019 Commission-level decision, EchoStar negotiated behind closed doors during the previous Administration in September 2024. Under the terms of that bureau-level decision, EchoStar would no longer have to meet the June 2025 buildout obligations…” and “I have asked FCC staff to seek public comment on the petition and the bureau’s 2024 extension of EchoStar’s buildout obligations.” I bolded and italicized the important words in this paragraph.
Carr has always been against this extension. In 2024, Carr, in comments to the NYP, called the extension “the worst abuse of agency process I have seen in my twelve years of working at the FCC…I have never heard of the FCC granting relief like this with no process, no public input, and no heads up.”
There are two avenues of attack that the FCC is implementing:
Review DISH’s compliance with the December 2024 obligations under the 2024 buildout extension, and
Review the legitimacy of the 2024 buildout extension itself.
With respect to the first avenue, I do not think SATS is at risk. Outside of fraud (which certainly has happened before with others with respect to spectrum buildouts), SATS has met its December 2024 obligation of 80% coverage and buildout milestones for 500 licenses. The issue is the timing required to review this compliance. DISH needs to provide license-by-license usage data, drive test results, RF propagation maps, and tower location data. The FCC needs to cross-reference filings with Universal Licensing System and spectrum dashboard data. There might even be independent field testing or audit in high-priority markets. These activities will not be completed by the end of June, when SATS will need to make a decision to turn back its coupon payment or file Chapter 11 bankruptcy.
I’m less certain about the second avenue of attack – reviewing and potentially reversing the 2024 buildout extension. Carr will use this opportunity to claim that the 2024 bureau-level decision needs to be modified and that the new buildout schedule needs to be approved at the commission-level (since the initial 2019 buildout commitments were approved at the commission-level). Carr might make the case that the Wireless Bureau did not have authority to grant the extension and the extension violated Administrative Procedure Act norms with regards to lack of public input (which was TRUE—the extension decision was made in 2 days without public input). SATS certainly has very valid arguments against this move but the FCC has very broad power to move the goalposts here. If there is a revocation of the 2024 buildout extension, then the original 2019 buildout deadlines are reinstated. Any non-compliance related to these buildout deadlines will have penalty and/or license forfeiture consequences. So far as investors, we know that broadly speaking the company has achieved 80% buildout of its network, but we don’t have details on specific compliances by band/license by June 15, 2025, the original 2019 buildout deadline.
2) Docket (25-173): The FCC is reviewing SATS’s usage of the 2GHz MSS license and potentially adding a new co-primary MSS licensee (SpaceX for now, but could be anybody).
In the 5/9/2025 FCC letter to SATS, this subject took a total of one sentence at the end of the second-to-last paragraph: “More generally, to help inform the FCC’s thinking about EchoStar’s use of spectrum, I have also asked agency staff to issue a public notice seeking comment on the scope and scale of MSS utilization in the 2 GHz band that is currently licensed to EchoStar or its affiliates.” But this is a big deal for SATS - much more so than the 2024 extension review.
Just to review – 2GHz refers to the 2000–2020 MHz and 2180–2200 MHz frequency blocks that DISH purchased in its 2009 acquisition of bankrupt entities Terrestar and DBSD. This band was originally licensed for mobile satellite services (MSS). After its acquisition, DISH got the FCC in 2012 to add a terrestrial license to this band in addition to the existing MSS License. The terrestrial license is called AWS-4. So now this band is used for both terrestrial (mobile) and MSS services by DISH. The licenses were on a co-primary basis, meaning both have to work together to avoid interference. Since DISH owned both the terrestrial and MSS licenses, that wasn't a problem. In fact, in the order, the FCC mentioned that it is not a good idea for these two licenses to be owned by different parties due to interference risks. This has been a long-standing policy of the FCC - to avoid split MSS/terrestrial licensees in order to sidestep interference issues.
When the FCC issued the terrestrial license, it took a “satellite-centric” view of this band, meaning that they made sure there’s a requirement for the terrestrial licensee to protect the MSS licensee from harmful interference—but not vice versa. This sounds fine for DISH as it holds both licenses, but what happens when a new co-primary MSS licensee is issued to a separate party? The requirement of the terrestrial licensee to protect the MSS licensee still applies. This is the key problem—by proposing to add a new co-primary MSS licensee to the band, the FCC is going to destroy the value of the AWS-4 terrestrial license.
SpaceX has tried six times in the past 2 years to convince the FCC to add itself as a co-primary MSS licensee in this band and has been rejected six times due to FCC’s concerns on interference issues (“the 2 GHz bands are not available for licensing an additional MSS system.”) and that DISH earth stations were already licensed and operating. The 7th time was the charm. It does not help that DISH has not really been using its 2GHz MSS license!
DISH has good arguments against the FCC’s attempt to introduce another MSS licensee, but the actual policy document that granted DISH its AWS-4 license is silent on this potential, other than to have some soft language such as: “the Commission posited that the complexities of coordination between mobile satellite and terrestrial uses identified by the Commission in 2003 remain, and would continue to render grant of licenses for terrestrial operations to an entity other than the incumbent MSS licensee impractical.” This type of language should give creditors a lot of concern. Moreover, nowhere in the document does it say DISH is the exclusive licensee on the 2GHz band.
In my opinion, outside of the actual policy documents, the FCC’s attempt to introduce a new MSS licensee has a lot of issues, because a new licensee should not impact incumbent licensees as a general rule. In fact, the new licensees should take care in making sure their services don’t interfere with existing services. Also, the FCC is in the business of promoting stability and investment in spectrum and serving public interest. The fact that they would destroy DISH's terrestrial business by introducing this new MSS licensee has a lot of legal risks. The FCC generally favors incumbents who’ve already built a network. DISH spent real money on the network.
In my opinion, this uncertainty needs to be resolved firmly by SATS. In SATS’ response filed with the FCC, SATS is asking the FCC to “reaffirm EchoStar’s exclusive rights as the incumbent AWS-4 and MSS licensee in the 2000-2020 MHz and 2180-2200 MHz bands.” The word “exclusive” is important here and goes above and beyond what was in the original policy document granting SATS its AWS-4 license. Ergen is trying to plug a hole in his spectrum rights.
Conclusion: These spectrum issues are complex and require time - of which SATS does not have. AWS-4’s spectrum value is legitimately in limbo until the FCC reaffirms SATS’ “exclusivity.” The fact that SATS does not have meaningful operations in the 2GHz MSS License is a problem.