FCC Chairman Carr uses his bully pulpit to threaten EchoStar and Boost Mobile

Phone Arena

14 hours ago

Current FCC Chairman Brendan Carr has been threatening to take away spectrum licenses from EchoStar, the company that now owns Dish Network and Boost Mobile. To put this in perspective, you need to understand that when T-Mobile proposed to buy Sprint, it would have left the U.S. with only three major carriers. The FCC wanted to leave four facilities-based carriers competing in the country. A deal was worked out and Dish Network agreed to buy Sprint's Boost Mobile and build a standalone 5G network. Every couple of years, the FCC requires Dish to cover a certain percentage of the country with 5G signals and Dish has passed each test so far. However, as we get to the last two tests scheduled for 2026 and 2028, the areas that need to be covered are harder to reach and will be more expensive to cover. EchoStar bought Dish on the last day of 2023 but its coffers aren't exactly overflowing with cash at the moment.
Current FCC Chairman Brendan Carr's threats against EchoStar are beginning to feel personal. | Image credit-X
Even though EchoStar has until 2028 under renegotiated terms to meet the final coverage test, the FCC's Carr has really been handing out some threats from his bully pulpit. In a letter dated May 9th written to EchoStar Chairman Charlie Ergen, Carr threatened to revert back to the original deadlines that the FCC agreed to with Dish. If the FCC were to do that, the final goal would have to be met today, June 14th, which of course EchoStar can't do.
In case you're curious, those targets, now scheduled for 2028, would require EchoStar to cover at least 70% of the population within each of its licensed geographic areas for its
AWS-4 and 700 MHz licenses, and at least 75% of the population within each of its licensed geographic areas for its H Block and 600 MHz licenses. Carr's letter also pointed out that the reason for the buildout goals was to prevent spectrum warehousing. As you might have gathered by the name, this is when a company builds up a hoard of spectrum that it doesn't plan on using with the goal of selling it to a wireless firm for a profit down the road. EchoStar's Ergen always claimed to have the desire to run a wireless firm when he was Chairman of Dish Network (Dish did float a losing $25.5 billion bid for Sprint in 2013). While T-Mobile spent nearly $8 billion during FCC auction 1001 in 2017 to pick up 1,525 600MHz low-band licenses (which was used to build the carrier's nationwide 5G network), and earned the majority of the news coverage, under the radar Dish was the second biggest spender. Even though it didn't own any wireless businesses at the time, Ergen's company spent $6.2 billion for 482 licenses.
This battle between the FCC and EchoStar is beginning to feel personal. In his letter, FCC Chairman Carr left a less than subtle hint that the regulatory agency isn't satisfied with the past buildout goals that were met by EchoStar. In fact, in plain English Carr wrote, "I have asked FCC staff to investigate EchoStar's compliance with its buildout milestones." Carr also writes that he has asked FCC staff to seek public comment about "reconsideration of the 2024 bureau-level extension of the 2019 Commission-level buildout."
If this sounds like politics are involved, you might be right. SpaceX has been trying to get the U.S. to force EchoStar to takeaway EchoStar's 2GHz spectrum holdings claiming that EchoStar "barely" uses it. SpaceX has over 25,500MHz of spectrum it can use but it just so happens that EchoStar's airwaves are superior when it comes to providing satellite services to cell phones, a business that SpaceX has high hopes for.
SpaceX is, of course, primarily owned by its founder, Elon Musk. Despite the recent breakup with President Donald Trump, a reconciliation seems likely so you can never rule out the possibility that Carr's animosity toward EchoStar is politically motivated as he is a Republican.
EchoStar has yet to have the customer success it would like to have even though it has built a standalone 5G network that should soon cover 80% of the population. Last July, Boost Mobile and Boost Infinite combined and with more promotion, Boost Mobile's Infinite Access plan could be a winner. It offers subscribers an annual device upgrade along with the usual features you'd expect from a top-notch wireless plan for $65 per month for a single line.
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