- Tower owners say Dish is using bankruptcy to walk away from billions in obligations tied to its abandoned 5G network
- More than 170 lawsuits have been filed against Dish Wireless by tower companies, fiber providers, equipment vendors and others
- Dish says its spectrum sale delay forced the Chapter 11 filing, but critics see a calculated effort to dodge infrastructure bills
One of the biggest things to emerge from Dish’s bankruptcy filing last week is EchoStar’s plan to sell Dish Wireless, with EchoStar acting as a stalking horse bidder, meaning it would set a minimum price for the assets.
Under the plan submitted to the U.S. Bankruptcy Court for the Southern District of Texas in Houston, Dish Wireless intends to sell “substantially all” of its assets to EchoStar as the stalking horse bidder or to “any party that submits a bid determined to be higher or better than EchoStar’s proposal.”
This was presented as part of a prepackaged plan supported by more than 88% of Dish DBS bondholders. However, tower companies objected to EchoStar’s attempt to fast track both the Dish DBS pay TV service and Dish Wireless cases, arguing that they’re two completely different proceedings and should be treated as such.
Bankruptcy Court Judge Christopher Lopez ruled that the wireless portion of the proceeding should be given more time, with a follow-up hearing to be held July 8 at the earliest.
Lawsuits against Dish pile up
More than 170 lawsuits have been filed against Dish by tower companies and other parties tied to the decommissioning of its 5G network. According to bankruptcy court documents, the decommissioning efforts thus far have included the removal of software from cell site equipment, turning down communications circuits and electrical connections and deploying field personnel to remove certain Dish Wireless equipment and storing it in various warehouse facilities.
But plenty of gear remains on structures across the country. According to Dish’s bankruptcy court filing, it deployed more than 144,000 radios across more than 24,000 tower sites across the country.
Cliff Steinberg, who owns a building in the SoHo district of Manhattan, agreed years ago to lease space to Dish for its 5G network but hasn’t collected any rent for months. Now he’s stuck with a bunch of 5G antennas and related equipment on his building and no way to get rid of it without spending a lot of money.
He told Fierce that he remains in the same position he was in a few months back despite numerous attempts to reach someone at Dish to work with him.
“No correspondence back,” he said. “Completely ignored.”
Landlords like Steinberg won’t be able to do anything about the equipment sitting on their property while the bankruptcy proceedings are underway. The moment Dish filed for Chapter 11, an automatic stay took effect, meaning a landlord can’t exercise control over property of the estate, such as removing it or disposing of it, among other restrictions, said David Nagele, principal attorney at Coastal Tower Law in San Diego.
Violating the automatic stay could result in a landlord facing damages, costs or sanctions, he told Fierce.
In addition, landlords should not unilaterally act to remove or dispose of Dish’s equipment at this stage because decommissioning is not the only possible outcome of these bankruptcy proceedings.
“Dish could sell some or all of that equipment to one or more companies through a court-approved sale or assign the lease itself to a new operator who would step into Dish's place as tenant, including responsibility for remaining equipment,” he said.
Tower companies go to court
All three publicly traded U.S. tower companies – Crown Castle, American Tower and SBA Communications – filed lawsuits after Dish informed them it would no longer be paying rent for equipment on their towers. Dish argues the equipment was rendered useless after the Federal Communications Commission (FCC) forced it to sell spectrum to AT&T and SpaceX for a combined total of more than $40 billion, in what it calls a “force majeure” event.
The Wireless Infrastructure Association (WIA), which represents tower companies and other stakeholders affected by Dish’s demise, never bought that argument. It was instrumental in arguing for the FCC to set up a $2.4 billion escrow trust fund as a condition of its approval of EchoStar’s spectrum sales to AT&T and SpaceX.
A big reason WIA pushed for the fund was the expectation that Dish Wireless would file for bankruptcy protection and no longer be held accountable for its bills.
WIA said as much in a statement released after last week’s bankruptcy court filing.
“It was clear from the outset that EchoStar intended for Dish Wireless to file for bankruptcy as part of its scheme to make massive profits on the back of its partners. This is why the American Wireless Builders Coalition and WIA fought hard for an escrow that EchoStar would be responsible for,” a WIA spokesperson told Fierce.
“There is no doubt EchoStar will continue to seek to game the system to avoid honoring its obligations to infrastructure partners. The FCC and the courts should not let that happen,” the WIA spokesperson said.
Crown Castle is one of the largest, if not the largest, creditor of Dish Wireless; it has said Dish owes it more than $3.5 billion.
Crown Castle applauded the FCC and FCC Chairman Brendan Carr’s leadership for taking steps to protect the industry by requiring the $2.4 billion escrow. “These escrow funds are even more critical in light of Dish’s bankruptcy filing,” the company said in a statement.
“We continue to do everything we can to protect the interests of Crown Castle and our shareholders by aggressively pursuing claims against EchoStar and Dish,” Crown Castle said. “Dish has now elected to take advantage of the bankruptcy process in another effort to shed its obligations while leaving many of the companies that helped finance, build and support its network holding the bag. We will vigorously pursue our claims in that forum and seek to ensure that EchoStar and Dish are required to honor their commitments.”
What happened with the AT&T spectrum transaction?
Dish DBS and Dish Wireless said they filed for Chapter 11 on June 30 because, due to “unforeseen delays,” the AT&T spectrum transaction had not yet closed. The funds were to be used to pay $2 billion of senior secured notes due July 1.
There’s some speculation that the AT&T deal didn’t close as expected because it requires Department of Justice (DoJ) sign-off since it’s all tied to the closure of the fourth facilities-based operator that was supposed to be the remedy in the T-Mobile-Sprint merger. However, Fierce Network was unable to confirm this.
Will SpaceX buy Dish's 5G network?
Roger Entner, founder of Recon Analytics, chalked up the Dish DBS and Dish Wireless Chapter 11 filings as “financial engineering” rather than a typical bankruptcy case.
It remains to be seen who would buy Dish’s 5G network. Dish has proposed a bid deadline of August 10, 2026. If no qualifying bids are received by then, an auction would be held on August 12, with a hearing to approve the sale to the successful bidder on August 17.
LightShed Partners analysts Walter Piecyk and Joe Galone said the cleanest path is for SpaceX, Charter Communications or another third party to buy the radios and renegotiate fresh leases with the tower companies.
“We suspect SpaceX would prefer to build its network from scratch, but this company is not afraid to take advantage of new opportunities and pivot when needed. It might be hard for SpaceX to pass up cheap radio assets with which it could negotiate favorable leases,” they said in a July 1 research note (registration required).
But that doesn’t answer why SpaceX wouldn’t already have made a bid. “If he [Musk] wanted it, he could have bought it a while ago,” Entner said. “If Elon wants to have a network, he builds it himself.”
Basically, Dish proposing to sell the network assets for pennies on the dollar. “What do you do with a network that has no spectrum and no buyer? You sell it for bits and pieces,” Entner said. “You scrap it.”