EchoStar blasts T-Mobile’s ‘stampede’ to consolidate

  • EchoStar wants to take on wireless incumbents AT&T, T-Mobile and Verizon
  • It’s been an uphill battle, made worse by EchoStar’s financial woes
  • T-Mobile’s drive to further consolidate the wireless industry isn’t helping matters

EchoStar, through its Dish Network subsidiary, has been trying to take on the U.S. wireless industry’s biggest incumbents, but it’s been a challenge, to say the least.

One big reason: Together, AT&T, T-Mobile and Verizon hold the vast majority of the nation’s supply of suitable and available spectrum. This spectrum concentration makes it easier for them to amass market share, “to the detriment of consumers, competition and innovation,” EchoStar told the FCC in a recent filing.

The FCC in April issued a public notice seeking comment as part of its periodic review of the state of competition in communications. EchoStar is just one of many entities letting the agency know what’s on its mind. However, EchoStar is uniquely positioned to comment on the wireless market given its subsidiary, Dish Network, was tapped to replace Sprint as the nation’s No. 4 facilities-based service provider.

EchoStar acknowledged that its entry into the wireless space was enabled as part of T-Mobile’s merger with Sprint. But despite its rapid buildout of the world’s first standalone 5G open Radio Access Network (RAN) cloud-based network, EchoStar “faces challenges as it continues to take on the incumbents,” the company said.

That’s putting it mildly. EchoStar desperately needs to raise capital before a $2 billion debt maturity comes due in November, and it’s been telling investors that it’s not even clear that it will be able to continue as a “going concern.” Some investment analysts think the company could file for bankruptcy in a matter of months.

Low-band spectrum  

For years, the collective wireless industry complained that Dish Network, co-founded by Charlie Ergen, was stockpiling spectrum, presumably to sell it to the highest bidder. However, now that Dish, a subsidiary of EchoStar, has built out a 5G network and is struggling to attract and keep customers, Dish is the one that’s complaining about T-Mobile’s spectrum position.

Since 2022, T-Mobile has announced plans to acquire spectrum in the “critically important” 600 MHz band, including from Columbia Capital, Horry Telephone Cooperate and Comcast, EchoStar noted in its filing.

“Each time T-Mobile has seemingly engineered these transactions to evade serious scrutiny by the commission,” EchoStar said. “While these transactions at first blush may appear to be about only a single market or a few blocks of spectrum, they must be analyzed in the context of T-Mobile’s years-long effort to dominate the critical 600 MHz band to the detriment of competition and consumers.”

In May, T-Mobile completed the acquisition of Mint Mobile and announced its intent to buy assets from UScellular. But allowing the UScellular acquisition to proceed would lead to even more concentration, making it harder for others to build competing networks, according to EchoStar.

“Potential competitors like EchoStar and cable companies have struggled to build competing networks as the largest providers spend billions on spectrum and competitor acquisitions. As a result, the market has become more and more concentrated,” EchoStar said. “This transaction would only make the situation worse.”  

800 MHz auction

Yet there’s something else eating at EchoStar, and it has to do with T-Mobile’s auction of its 800 MHz spectrum. T-Mobile is refusing to provide Dish with even preliminary information about the auction, according to the filing.

Granted, Dish told everybody earlier this year that it wasn’t going to buy the spectrum for $3.59 billion when it was given first dibs, saying it wasn’t successful in getting the necessary financing. That’s what triggered T-Mobile to launch the 800 MHz auction. But since April 9, EchoStar’s been asking T-Mobile for the relevant rules and procedures so that it can potentially take part in the auction, and T-Mobile is refusing to share.

“Unfortunately, T-Mobile has categorically refused to provide these materials on this basis of its erroneous view that ‘Dish may not participate in the auction,’” EchoStar said, citing an April 22 letter from T-Mobile’s senior corporate counsel Heather Johnson to Dish EVP of External & Legislative Affairs Jeff Blum.

“Tellingly, while T-Mobile has identified no harm that would result from allowing Dish’s participation in the auction – nor could it – Dish has detailed (1) why its participation may increase the chances of a successful auction; (2) its investment in the licenses and ability to put them to use for consumers; and (3) why T-Mobile will be left no worse off than it is today if Dish is unable to purchase the licenses at auction following receipt of the relevant rules and procedures,” EchoStar wrote. “Still, T-Mobile has remained steadfast in its refusal to provide Dish with even preliminary information about the auction.”

A T-Mobile spokesperson declined to comment on Dish’s eligibility for the auction. He referred questions about the auction to CEO Mike Sievert’s comments during the Q1 earnings call, where Sievert noted the auction had commenced.

“We have interested parties. We have nonbinding indications of interest. There's reason to believe that we will meet the reserve. So it's a little too soon. Everything is nonbinding, but we'll have more to say after we get past kind of the binding parts of this. So stay tuned,” Sievert said on April 25.  

Odds & ends

Speaking of spectrum, EchoStar has some other ideas for improving its availability.

The company is urging the FCC to introduce a rulemaking that would seek comment on a national spectrum screen of 25% and in particular, a low-band spectrum screen of 25%.

EchoStar also urged the FCC to adopt rules that authorize high-power fixed 5G broadband service in the 12.2-12.7 GHz band, thereby freeing up 500 MHz of spectrum. And like a lot of carriers, it would also like to see the commission initiate a rulemaking seeking proposals to increase authorized power levels in the Citizens Broadband Radio Service (CBRS) band.