- Charlie Ergen, the billionaire chairman of EchoStar, met with President Trump at the White House on Thursday
- Trump called FCC Chairman Brendan Carr into the meeting, which concluded with the president encouraging Carr and Ergen to reach some sort of deal, according to Bloomberg
- This all happened ahead of today’s launch of Trump Mobile, a new MVNO using the networks of all three big U.S. mobile carriers
Shares of EchoStar were up more than 45% today after a report surfaced Friday that President Trump intervened in the dramatic conflict involving EchoStar Chairman Charlie Ergen and Federal Communications Commission (FCC) Chairman Brendan Carr.
According to Bloomberg, Ergen met with Trump on Thursday, a day after a long-awaited meeting with FCC Chairman Brendan Carr. In the meeting with Carr, Ergen reportedly was told that EchoStar needs to start selling some of its spectrum licenses or risk losing them. The spectrum licenses are conditional on EchoStar meeting certain 5G buildout milestones.
We don’t know exactly what transpired in these meetings, but apparently during Ergen’s meeting with Trump, the president phoned Carr, who joined the meeting at the Oval Office. Among the topics they discussed was whether Ergen’s political donations included both Republican and Democrat candidates.
It’s unclear why Trump agreed to meet with Ergen in the first place. The Bloomberg story suggested it was because Trump didn’t want a major American company to go bankrupt as it would create uncertainties for other businesses. But another theory is that NewsMax CEO Chris Ruddy intervened.
During the meeting with Ergen and Carr, Trump reportedly called Ruddy to ask if EchoStar’s Dish satellite TV service carried conservative news outlets like his. Ruddy told Bloomberg that Newsmax has had a positive relationship with Dish and that Dish enables diverse voices like Newsmax to reach their subscribers.
Who knows? Maybe Trump just had wireless on his mind ahead of today’s launch of the new Trump Mobile service, which uses the networks of all three of the major U.S. mobile carriers but not, apparently, EchoStar’s. Touche.
The meeting with Trump, Ergen and Carr reportedly ended with the president encouraging Carr and Ergen to work together and reach some kind of deal.
EchoStar declined to comment.
What it means for EchoStar
Ergen’s meeting with Trump and Carr is positive for EchoStar because Carr now knows that if EchoStar files for bankruptcy, the president will not be happy, and it increases the odds that EchoStar will get an extension on its spectrum licenses, New Street Research policy analyst Blair Levin said in a note for investors on Friday.
It’s curious that Elon Musk’s desire for EchoStar’s 2 GHz spectrum didn’t come up during the meeting because that’s been a big part of the story behind Carr’s inquiry into EchoStar. But that could be because no one with knowledge of the meeting chose to talk about it with those who spoke with the Bloomberg reporters, Levin said.
“We think it probably did not come up. And we think that is also a good sign for EchoStar. After all, in a meeting in which the president clearly signals, through the discussion of campaign contributions and the treatment of NewsMax, that the president is not shy about dealing with policy issues through the lens of tribal loyalties, the absence of the discussion of the impact of the decision on the president’s largest campaign contributor – even if he is in a version of a dog house as far as Trump is concerned – is a plus for EchoStar,” Levin said.
Regardless of Trump’s motivations, others agree the meeting is a positive sign for EchoStar.
“It is good to have the president on your side. If your interests are aligned, then things are easier,” said industry analyst Roger Entner, founder of Recon Analytics.
However, he said it would be much easier for everybody if EchoStar were to sell spectrum it isn’t using in rural areas versus a protracted proceeding at the FCC.
As for potential buyers, that’s easy: AT&T, T-Mobile and Verizon are always interested in buying more spectrum. “The question is always the price,” he told Fierce.
Trump’s new wireless service
Today happens to be the launch day for Trump Mobile, a new Trump Organization service using all three major cell phone carriers. It offers the 47 Plan, which sells for $47.45/month, with no contract and no credit check.
It was announced in Manhattan with great fanfare by Trump’s sons Eric Trump and Donald Trump Jr. According to the Trump Organization, the launch was designed to coincide with the 10-year anniversary of President Trump's announcement of his first presidential run.
The organization said it will release the “T1 Phone” in August and described it as a “sleek, gold smartphone engineered for performance and proudly designed and built in the United States.”
President Trump has been calling for smartphone manufacturers like Apple to manufacture phones in the United States. But since no one has managed to figure out how to profitably manufacture a smartphone in the U.S., we’ll be looking for more details as to how this all evolves.
Levin said it’s probably a coincidence that Trump had the meeting with Ergen and Carr while his organization was lining up this mobile service.
Meanwhile, imagine being one of the phone company reps assigned to negotiate a Trump MVNO deal.
“As Trump would say, that person would have no cards,” Levin quipped. “Helping EchoStar theoretically would help the economics of a Trump mobile service, but we think Trump has figured out that when negotiating an MVNO deal, he already has all the leverage he needs.”