The telecom community’s ears recently perked up when the Wall Street Journal reported that Federal Communications Commission (FCC) Chairman Brendan Carr sent a letter to Charlie Ergen, Chairman of the Board of EchoStar Corporation, threatening to revoke a significant portion of the company’s spectrum licenses.  According to Carr, EchoStar is “warehousing” spectrum by failing to meet its buildout requirements.  On May 12, 2025, the Commission issued a notice inviting public comment on the question.

Given the gravity of the Chairman’s accusation, let’s start with a bit of background for context.

Over the years, EchoStar has purchased licenses for a significant amount of radio spectrum suitable for mobile wireless services both at auction and in the secondary market.  In 2019, as a condition of the government’s approval of the Sprint/T-Mobile merger, the merged entity agreed to spin-off Boost Mobile to DISH (EchoStar’s predecessor company).  In exchange, DISH agreed to deploy a modern 5G network to 70% of the U.S. population and become a fourth competitor to the three major mobile wireless carriers (AT&T, Verizon, and T-Mobile).  In September of 2023, the FCC confirmed that DISH had in fact met the 70% requirement.  However, because building a greenfield nationwide wireless network is no easy task even in the best of financial conditions, in September 2024 EchoStar asked the FCC’s Wireless Bureau to revise certain of these buildout requirements to better account for market realities.  This extension, however, was conditioned on EchoStar covering 80% of the U.S. population with its network, accelerating and expanding the final milestones for hundreds of other licenses, and deploying 24,000 sites.  The Bureau granted that request, as it has done hundreds of times for Commission licensees over the years.  In reliance on the agreement with the Bureau, EchoStar got to work—and this year it certified that it had met those new commitments.

This process is hardly a revelation.  When an entity acquires a spectrum license the deal comes with terms.  Given the scarcity of spectrum, the FCC requires that license holders actually use it, and such use is enforced through buildout requirements.  Thus, Chairman Carr’s inquiry is not, in itself, an issue.  The legitimacy of any licensee’s buildout requirements rests on basic contract law principles—both parties understood the terms when the deal was struck.  Licensees bid billions of dollars to acquire spectrum at auction (or purchase it on the secondary market) and invest heavily in their networks with full knowledge of these obligations, factoring compliance costs into their business plans.  The FCC’s authority to reclaim unused spectrum is the mechanism that makes the entire system work.  It isn’t punitive—at least it shouldn’t be. 

But for this system to work, the Commission’s enforcement power must be exercised predictably and fairly and through clear, enforceable agreements that both sides can rely upon.  Firms rely on their regulatory contract with the government, both in terms of network investment and, in the case of wireless networks, what they are willing to pay at auction for spectrum.  If wireless firms perceive that they will not be treated dispassionately and fairly by the government, then companies will either curtail their investments—knowing the rules could shift beneath them—or demand significant risk premiums that would ultimately drive up costs for consumers.  

The FCC now faces the straightforward question of whether EchoStar has met its revised buildout requirements and whether the extension from last year should remain in place.  EchoStar is attempting the herculean task of constructing a greenfield fourth facilities-based nationwide wireless network on a relatively short time-table—the comforting lynchpin of the federal government’s approval of the T-Mobile/Sprint merger in 2019.  Since that time, public records indicate that EchoStar has invested billions of dollars in its wireless network (covering 80% of the U.S. population), has taken the lead in developing innovative O-RAN architecture, and is gaining momentum in growing subscribers.  EchoStar is not presently at the level of an AT&T or Verizon, but no reasonable person would expect that to occur in a few years. 

Which brings us to the present dispute.  EchoStar says it has met its revised buildout requirements.  Chairman Carr appears not only to have some doubts about whether EchoStar has met its buildout obligations, but even about to which requirements the company is subject (the 2019 Commission-imposed commitments or the 2024 Bureau-imposed commitments).  The open question is whether the FCC will review EchoStar’s filing with a dispassionate analysis of technical data and legal precedent, or else be influenced by outside pressures or competing interests.   I have some concerns.

First, Carr’s letter offered no meaningful statistics to support his allegation that EchoStar is deliberately warehousing its spectrum—a glaring omission. 

Second, Carr complains that EchoStar’s revised buildout requirements were “negotiated behind closed doors during the [Biden] Administration” at the Bureau level and were never brought up for a full Commission vote.  But Carr’s argument is a red herring.  The FCC’s assorted Bureaus routinely act on delegated authority and such actions are part and parcel of how the Commission operates—including under the leadership of Chairman Carr.  To wit, the Commission recently approved a $20 billion merger between Verizon and Frontier which, consistent with past practice, included an assortment of “voluntary” (i.e., coerced) merger commitments wholly unrelated to the competitive effects of the transaction—such as forcing the merging parties to adopt a “nationwide low-income pricing option,” to settle labor disputes with tower workers, and for Verizon to eliminate its “Diversity, Equity, and Inclusion” corporate practices.  And guess what?  This transaction was never put up for a full Commission vote.  Instead, the merger was approved on delegated authority at the Bureau level.

Third, there’s the Musk overhang.  EchoStar’s spectrum dispute with Elon Musk’s Starlink also casts a pall over the Chairman’s inquiry.  Making a long and sordid story short, EchoStar holds exclusive licenses in the 2 GHz band it purchased in the secondary market.  While this spectrum was originally dedicated for Mobile Satellite Service (MSS), in 2011 EchoStar successfully petitioned the FCC to repurpose these licenses for terrestrial use for its new network.  Starlink, however, covets this spectrum for its MSS network.  Starlink’s argument to the FCC echoes a similar refrain: EchoStar is not fully utilizing this spectrum, so the Commission should simply give the spectrum to Starlink who can put it to a better and immediate use.  Chairman Carr seems sympathetic:  four days after Carr sent his letter to Ergen, the FCC’s Satellite Bureau opened a docket to explore Starlink’s ability to use EchoStar’s 2 GHz MSS spectrum.  This is peculiar since the Commission has repeatedly found that the 2 GHz spectrum cannot be shared and only EchoStar has the ability to manage the inevitable interference between mobile terrestrial and mobile satellite use.   

Finally, there is the timing of Carr’s letter.  EchoStar has sophisticated counsel and is well aware of its regulatory deadlines that come up in the regular course of business.  Carr’s letter, however, seems deliberately intended to accelerate that regular order.  But to what end?  Given the letter’s tone, is Carr trying to send a not-so-subtle message to Wall Street that the cake may already be baked for EchoStar?  If this is in fact the case, then the effect will be predictable: the FCC will have poisoned the well with Wall Street about the continued viability of EchoStar’s spectrum portfolio, and no one should be surprised if EchoStar’s cost of capital increases to account for the heightened regulatory risk.  And, if capital is difficult (if not impossible) to procure, then EchoStar’s ability to meet its buildout requirements will become even more difficult.  A vicious circle indeed, turning Chairman Carr’s allegations into a self-fulfilling prophecy: EchoStar just announced that it will not make the approximately $326 million cash interest payment on its 10.75% senior spectrum secured notes due in 2029, casting doubt on the company’s future operations and leading to a sharp decline in its stock price.

As I see it, this can go two ways: the FCC either engages in the professional, dispassionate review of the evidence and legal precedent, or it doesn’t.  I make no wager.  If it’s the former, then all is good.  If it’s the latter, then stripping EchoStar of its exclusive licenses would undercut the federal government’s entire premise of approving the Sprint/T-Mobile deal, add risk to acquiring spectrum licenses and investment in networks, stink of bias, reduce future spectrum auction revenues, and ultimately harm consumers through reduced competition or higher costs.  The integrity of America’s spectrum policy is at stake.

Lawrence J. Spiwak is the President of the Phoenix Center for Advanced Legal & Economic Public Policy Studies (www.phoenix-center.org), a non-profit 501(c)(3) research organization that studies broad public-policy issues related to governance and social and economic conditions, with a particular emphasis on the law and economics of the digital age.