- EchoStar’s Dish DBS subsidiary made scheduled interest payments that were originally due on July 1, avoiding default
- The company said it has remained focused on resolving the concerns raised by the FCC in May
- EchoStar might reveal more about its plans when it reports Q2 results on Friday — but don’t hold your breath
Shares in EchoStar were up more than 8% today after the company revealed in an 8-K filing that its subsidiary Dish DBS (DDBS) made scheduled interest payments that were originally due July 1, thereby avoiding default.
The company said it continues to work cooperatively with the FCC to resolve concerns the government raised in May, “including by providing responses and information at the FCC’s request.”
At the same time, “the company continues to progress wide-ranging efforts to explore alternative or complementary pathways that could, if successfully implemented, resolve the FCC’s stated concerns in a manner acceptable to the company,” the filing stated.
FCC Chairman Brendan Carr sent a letter to EchoStar Chairman Charlie Ergen in May outlining concerns about the company’s 5G network buildout obligations and the use of 2 GHz spectrum licenses. Elon Musk’s SpaceX previously had complained that EchoStar wasn’t using the 2 GHz/AWS-4 spectrum as authorized and argued that the FCC should let satellite companies, like SpaceX, use it.
The FCC subsequently launched formal inquiries into the EchoStar/Dish/Boost Mobile 5G buildout as well as its use of the 2 GHz mobile satellite spectrum (MSS). EchoStar said the investigations created a dark cloud of uncertainty over its business, apparently so much that it led to missed interest payments.
During a press conference after the FCC’s open meeting last week, Carr said his agency is pushing hard to free up spectrum, and “you have Dish effectively over the years sitting on a tremendous amount of spectrum that simply isn’t loaded.”
He reiterated that message the following day during a CNBC interview that was mostly about the Paramount/Skydance merger but touched on mobile wireless providers near the end.
Carr said his agency is “doing a lot of discussions with Dish and Charlie Ergen as well. He’s got a lot of spectrum there that frankly has not been put to its highest and best use in terms of loading the spectrum. We’ve been in conversations with him … Those conversations are ongoing.”
What’s EchoStar contemplating?
It’s not clear what is being contemplated. EchoStar did not immediately respond to a request for comment.
While the language in the 8-K SEC filing is vague, New Street Research analyst Philip Burnett interprets the text to say that the company is leaving open the possibility of selling at least some of its spectrum, the most likely buyers of which are Verizon, T-Mobile and AT&T.
“It’s possible we will gain greater clarity about the company's intentions when they report [Q2] results on Friday (though we wouldn't count on it),” he wrote in a note for investors today.