The U.S. Federal Communications Commission said Tuesday it approved EchoStar’s $40 billion sale of wireless spectrum to SpaceX and AT&T because the move would boost connectivity across the country.
EchoStar is selling approximately 50 megahertz of its nationwide spectrum to AT&T for its 5G network for $23 billion, including 30 MHz of mid-band spectrum and 20 MHz of low-band spectrum. EchoStar is selling 65 megahertz of its spectrum to SpaceX for $17 billion to boost Starlink’s next-gen device-to-device offering.
AT&T and EchoStar will create a hybrid Mobile Virtual Network Operator arrangement that ensures the continued viability of Boost Mobile, the FCC said.
SpaceX is gaining access to exclusive-use spectrum for a Starlink device-to-device service and other offerings. The FCC said AT&T’s low-band spectrum will expand coverage across the United States, especially in rural and underserved areas.
In June, President Donald Trump, prodded EchoStar, parent of Dish TV, and FCC Chairman Brendan Carr to reach a deal over the company’s wireless spectrum licenses. U.S. satellite TV provider DirecTV, terminated its agreement to acquire EchoStar’s satellite television business in 2024 over a failed debt-exchange offer.
The FCC is also granting waivers for SpaceX to address convergence of wireless and satellite broadband. The announcement allows SpaceX to use its new spectrum flexibly for terrestrial, space-based and hybrid network architectures.
The FCC also said it is requiring AT&T to build its network years faster than the company originally requested and the FCC’s rules ordinarily require for builds after auction.
The FCC is requiring EchoStar to establish an escrow account of $2.4 billion that would cover any amounts that Echostar may eventually owe in connection with disputes over work under the licenses.
The FCC said it had received public comments that EchoStar has indicated it will not pay companies for construction of a new 5G network, including leasing of space on towers and rooftops that it was required to undertake as a license condition.
The FCC said it would allow courts and other bodies to adjudicate the issues and the escrow funds would potentially cover any obligations Echostar may ultimately owe.
Echostar said it appreciated the approvals but said, “These approvals come with an unprecedented involuntary escrow condition. We are analyzing this requirement and evaluating next steps.”
Source: Reuters.com