- The FCC’s queries about EchoStar’s business introduced a “dark cloud” over EchoStar’s spectrum rights
- The cloud has stymied EchoStar’s decision making, the company told the FCC
- Unsurprisingly, vendors are coming to EchoStar’s defense
The FCC’s inquiries into EchoStar’s terrestrial wireless and satellite businesses are already harming the company’s plans to succeed as the fourth facilities-based U.S. wireless carrier.
That’s what EchoStar told the agency in a nearly 90-page filing this week. The FCC earlier this month opened public notices about EchoStar’s 5G buildout and its use of the 2 GHz band for mobile satellite services. An initial round of comments came due Tuesday, with a second deadline for reply comments set for June 6.
The FCC’s actions have created a “dark cloud of uncertainty” over EchoStar’s spectrum rights and its open RAN 5G network, the company said in the filing.
“This cloud has effectively frozen EchoStar’s decision making – it cannot reasonably invest more capital into a buildout if the commission indicates it may take away its licenses through unprecedented actions,” the company wrote. “The public notices also imperil the underpinning of commission spectrum auctions and policy – at no other time has the agency opened such inquiries after a company has invested billions into both acquiring spectrum and deploying a network in conformance with the agency’s requirements.”
EchoStar said it has invested more than $43 billion to deploy its network, which now serves about 1.3 million of its 7 million customers. Customers who are not on EchoStar’s network are using T-Mobile's or AT&T’s network under MVNO deals, but EchoStar is trying to get more customers on its own network for owner’s economics.
EchoStar also disclosed that it added 88,000 wireless subscribers in April. That follows Q1, when it added 150,000 net wireless additions, reversing a years-long losing streak.
EchoStar’s shares were down about 1% today, trading at $19.95.
What others are saying about EchoStar
While EchoStar’s biggest spectrum foe right now is SpaceX, other stakeholders in the wireless industry are coming to its defense and urging the FCC to back off.
“We would strongly urge the Commission to refrain from taking any actions that would modify EchoStar’s current buildout timeline or alter EchoStar’s existing spectrum licenses,” a group of more than 35 general contractors that work with EchoStar told the FCC.
Software and hardware vendors said they, too, are proud to work with EchoStar and build its first-of-a-kind nationwide 5G Open RAN network. “Together, we are working to provide clear alternatives to untrusted equipment vendors,” said a group that includes Mavenir, Dell Technologies, JMA Wireless, Fujitsu, Samsung, Rakuten Symphony and more.
Others coming to EchoStar’s defense in one form or another are the Open RAN Policy Coalition, the Rural Wireless Association, Incompass, the Competitive Carriers Association, Public Knowledge, Open Technology Institute at New America, as well as tower companies and some individuals who want Boost Mobile to prevail.
EchoStar vs. SpaceX
As for SpaceX, it’s been fighting with EchoStar/Dish over spectrum rights for years. In the current spat, SpaceX argues that EchoStar is barely using the AWS-4 band to provide 5G or any other service to U.S. consumers. SpaceX points to its own measurements showing that EchoStar’s use of the AWS-4 and AWS-H block is “de minimis at best” – in the range of 1% to 5% of the activity measured in an adjacent band.
By SpaceX’s reasoning, that’s proof positive that the spectrum should be made available to other companies – like SpaceX.
One of the hottest areas right now is the direct-to-device (D2D) market. EchoStar plans to use the 2 GHz band for its own D2D service and argues that SpaceX is trying to prevent EchoStar from competing in this space.
SpaceX already possesses licenses for 25,500 MHz of spectrum, which it got “without paying a single penny to the U.S. Treasury,” EchoStar noted. As SpaceX is introducing its own D2D in the United States with T-Mobile, “it wants to cripple EchoStar’s ability to offer a competing D2D service … There is no basis for SpaceX to pirate EchoStar’s 2 GHz spectrum.”