- Former FCC commissioner Nathan Simington blasted FCC Chairman Brendan Carr’s handling of EchoStar proceedings
- Carr hasn’t said what he plans to do; Fierce reached out to his office but did not hear back
- It’s ironic that after years of being accused of warehousing spectrum, EchoStar Chairman Charlie Ergen is now actually using his spectrum to support Boost Mobile
In an astonishing turn of events this week, a former Republican FCC commissioner slammed fellow Republican and FCC Chairman Brendan Carr for making a “dangerous mistake” in threatening to take away EchoStar’s spectrum licenses.
“The FCC threatens such severe sanctions that they put EchoStar’s financial viability in question and threaten to kill the company,” newly ex-FCC commissioner Nathan Simington wrote in an opinion piece. “This places every holder of a spectrum license in a riskier position and will raise consumer prices by forcing every licensee, not just EchoStar, to charge higher risk premiums.”
He’s right, and every license holder in the wireless industry should be concerned. But Simington’s curiously timed Op-Ed – less than a week after he left the FCC – is just the latest turn of events in what has been a catastrophic mess for EchoStar, the parent of Dish Network and Boost Mobile.
EchoStar warned last month that the FCC’s investigations into its terrestrial and satellite businesses cast a “dark cloud of uncertainty” over its spectrum rights and its open RAN 5G network as it inches ever closer to possible bankruptcy.
The cloud seems to be getting darker by the day, even though EchoStar has met its 5G interim buildout deadlines.
Under the terms negotiated with the prior FCC before Carr became chair, EchoStar has until 2026 and 2028 to meet its final buildout deadlines, which are for harder-to-reach parts of the country and therefore more challenging and expensive to meet.
But if the FCC were to revert back to old deadlines before the September 2024 deal, as Carr seemed to suggest in his May 9 letter to EchoStar Chairman Charlie Ergen, it would need to meet those buildout targets by June 14, 2025. That’s tomorrow.
Oh, the irony in EchoStar’s situation
In his letter to Ergen, Carr also pointed out that the FCC structures buildout obligations to prevent spectrum warehousing. For decades, Ergen was accused of buying up wireless spectrum with the sole purpose of selling it to the highest bidder when he could get the highest price, i.e., warehousing spectrum.
Then, as a “remedy” to competition concerns related to the T-Mobile/Sprint merger, the U.S. government decided that Dish Network should become a fourth facilities-based carrier. Sprint’s Boost Mobile business was to serve as the foundation while Dish built a 5G network from the ground up.
Dish, now under EchoStar, did just that using open RAN technology. Today, it reaches 80% of the U.S. population. EchoStar is using various spectrum bands to do that.
Now, though, Carr is threatening to take away spectrum when Ergen is actually using it? Weird.
More fishy smells
The way Carr is sticking it to EchoStar further erodes any confidence anyone might have had in the agency’s ability to remain non-biased. There was a time when FCC staff took great pride in being non-partisan in their decision-making. Heck, Julius Knapp, who retired as chief of the FCC’s Office of Engineering and Technology in 2020, served more than 45 years at the FCC over several Republican and Democratic administrations.
But this whole thing smacks of bias.
As Simington pointed out, Carr’s decision to open a proceeding into the possibility of sharing the 2 GHz spectrum between EchoStar’s terrestrial uses and satellite services came after the FCC repeatedly found it’s impossible to share the spectrum in that way.
But SpaceX has been lobbying to use the 2 GHz band, claiming EchoStar “barely” uses it. Huh? SpaceX already has about 25,500 megahertz of spectrum at its disposal, yet it wants what EchoStar has? That's probably because EchoStar's holdings are better suited for direct-to-device (D2D) satellite services to cell phones – and SpaceX wants these airwaves for free.
What happens next?
In a note for investors this week, New Street Research analyst Blair Levin surmised that Simington probably told Carr, in private, everything that he wrote in his editorial about EchoStar but that Carr disregarded his arguments; otherwise, the commentary would be unnecessary.
“We think it was intended to affect the next Republican FCC Commissioner Olivia Trusty, the White House and other MAGA influencers,” Levin said.
Simington’s departure left the FCC without a quorum, and it’s unknown what Trusty’s position is on EchoStar; her hearing was held in April, before Carr took action against EchoStar.
But we might hear more soon. Word is that Senate Majority Leader John Thune, (R-S.D.), made a procedural move last night to set up a possible floor vote on Trusty’s confirmation. If that happens, the FCC might have a quorum as early as Wednesday.
Stay tuned. EchoStar’s future hangs in the balance, as does the state of competition in wireless.
Op-eds from industry experts, analysts or our editorial staff are opinion pieces that do not represent the opinions of Fierce Networ