- The FCC says EchoStar can’t use a $2.4 billion trust fund to pay itself or its affiliates
- The trust fund was created to pay the contractors, tower companies and infrastructure partners that built Dish Wireless’ 5G network
- Organizations that represent tower companies and other contractors said Dish was taking steps to turn the trust fund into a slush fund for itself
In the category of “we shouldn’t have to tell you this,” the Federal Communications Commission (FCC) spelled it out in a July 30 memo: EchoStar and its subsidiaries are not eligible for payments from the $2.4 billion trust fund that was set up to pay companies that built EchoStar’s 5G network.
The FCC’s order, officially known as a Memorandum Opinion and Order, was issued by Wireless Telecommunications Bureau Chief Joel Taubenblatt.
It states that when the FCC approved EchoStar’s sale of spectrum licenses, it required EchoStar to set up a trust fund to help pay companies that built its 5G network. While EchoStar was required to build a network as a condition of its licenses, it refused to pay the companies that actually did so.
But in its June 30 bankruptcy filing, EchoStar told the court that the fund can be used to pay a loan that one EchoStar subsidiary “supposedly made to another, a claim so large it threatens to swallow the fund. We disagree and clarify what should be obvious – that the fund cannot be used to pay companies that did not build the network,” the FCC’s order states.
EchoStar declined to comment on the FCC’s order.
As part of the FCC’s approval for EchoStar to sell spectrum licenses to AT&T and SpaceX for a combined total of more than $40 billion, the FCC conditioned it on EchoStar creating this $2.4 billion trust fund to help pay obligations incurred in connection with the construction, maintenance and ultimate decommissioning of its network.
The final SpaceX deal isn’t expected to close until 2027, but EchoStar’s $23 billion spectrum sale to AT&T closed this week. As part of that deal, AT&T deposited $2.4 billion to create the trust fund and paid the remainder of the bill – about $20 billion – to EchoStar.
A winding road to bankruptcy
Various subsidiaries of EchoStar, including Dish Wireless, filed bankruptcy cases in the U.S. Bankruptcy Court for the Southern District of Texas, where Judge Christopher Lopez is presiding over it.
According to a disclosure statement filed by EchoStar entities, Dish Wireless and some of its affiliates and subsidiaries spent more than $13 billion to build out the open RAN 5G network, primarily funded by an intercompany loan from non-debtor Dish Network Corporation, of which $8.8 billion remains owed.
The disclosure statement further states that the $8.8 billion claim, which has been assigned to a trust for the benefit of holders of certain Dish DBS Corporation senior notes, might be asserted as a claim against the FCC trust fund, rather than being asserted as a claim against the bankruptcy estate, according to the FCC.
“The purpose of the [FCC] fund is to pay those entities (including general contractors) that performed the work of building EchoStar’s 5G network, not those that provided EchoStar the funds to do so, even if providing that money was necessary for the work to be performed,” the FCC said.
The reason for the fund was to “ensure that some of the tens of billions of dollars EchoStar is receiving for its wireless licenses be used to pay those who built the 5G network that EchoStar promised and was required to build as a condition on holding those licenses. That purpose is not realized if EchoStar pays the money to itself (directly or indirectly) or uses it to pay other of its debts or those of its subsidiaries or affiliates,” the FCC order concluded.
Dish sent notices to thousands of 5G network contractors – landlords that hosted 5G network gear, tower companies and other infrastructure partners – starting in September 2025 informing them that Dish Wireless was excused from the contracts due to a “force majeure” event that transpired when the FCC threatened to take its licenses away.
At the same time, EchoStar is getting billions of dollars from AT&T and SpaceX, as well as a ~3% ownership in SpaceX, while walking away from Dish Wireless’ contracts.
WIA, builders coalition react
Naturally, that doesn’t sit well with the folks who built the network. The Wireless Infrastructure Association (WIA) and American Wireless Builders Coalition lobbied the FCC for the $2.4 billion trust fund and pressed the FCC to clarify that EchoStar, Dish or any of their affiliated entities are not eligible to submit claims or get any of the money from the trust.
WIA Chief Strategy Officer Mike Saperstein applauded the agency’s action today to protect the trust fund.
“This order ensures those dollars go to the hard-working infrastructure providers that earned payment and are not absurdly consumed by Dish/EchoStar to benefit itself,” he said in a statement.
A spokesperson for the American Wireless Builders Coalition echoed his comments and said the FCC’s action ensures that the trust fund doesn’t get “swallowed up by bogus claims” from Dish/EchoStar.
“We appreciate the commission moving quickly to guard against EchoStar unjustly enriching itself on the backs of America’s wireless builders,” the spokesperson said.
More stories about Dish and its bankruptcy process:
Dish’s bankruptcy exposes the messy aftermath of its 5G gamble