The FCC's Dangerous EchoStar Mistake

Yahoo

a day ago

The complexities of telecom regulation can bewilder even seasoned professionals. Thus, a headline like 'FCC to Investigate EchoStar's 5G' may seem too boring and technical to look into. This would be a mistake: this action by the Federal Communications Commission (FCC) has the potential to be seriously market-disruptive, and even to impair American national security.
Among the major national carriers, EchoStar is a technological leader in areas most relevant to competition with China and to national priorities in trade and advanced manufacturing. That makes it a national strategic asset. As a true fourth national network, it protects consumer choice and lower consumer prices. The FCC threatens such severe sanctions that they put EchoStar's financial viability in question and threaten to kill the company. 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. Here's how we got here.
On May 9th, the FCC was directed to open two proceedings on EchoStar: one on 5G buildout compliance, the other on the use of EchoStar's 2 GHz spectrum licenses. On May 10th, the FCC opened an additional proceeding into sharing 2 GHz between EchoStar's terrestrial uses and satellite services, something the FCC has repeatedly found to be impossible in prior proceedings.These proceedings have the cumulative effect of threatening EchoStar with numerous spectrum license revocations, which has severely affected EchoStar's ability to raise capital. EchoStar faces the heavy lift of building a capital-intensive national network, which will ultimately cost tens of billions. That makes these threats existential to the company.
Every holder of a spectrum license is taking note: threatening license revocations is the ultimate sanction because without licenses, you don't have a wireless business. This sanction is very rare in the cell phone business. The last time it happened was when NextWave lost licenses for non-payment after its 1998 bankruptcy, and those revocations were overturned at the Supreme Court in 2003. EchoStar committed to build its network, and to spend the billions of dollars required to do so, as part of the U.S. Government's commitment to four national networks when T-Mobile acquired Sprint in 2020. EchoStar claims to have met its commitments, so moving to threaten its licenses seems extremely market-disruptive out of proportion to any claimed offense.
But the concerns with these threats go farther. For years, we've heard that China is beating us in 5G. It's important to look under the hood and ask what this means in order to appreciate what's going on with EchoStar. For consumers, 5G was supposed to deliver fast streaming and new applications. But the more interesting part of 5G were always its applications to manufacturing, logistics, and public safety—all areas where China is realizing far greater gains than we are.
China has about 16,000 '5G private networks' while we have less than 400. These are the networks supporting advanced Chinese factories and ports. And China has about 77% of its population on '5G Stand-Alone,' versus only about 37% in the USA—meaning that Chinese cell phone networks are more capable than ours of supporting advanced security and performance features for public safety. The conclusion is inescapable: American 5G technology needs more radios, more advanced network cores, and more capital to keep pace with China. American 5G deployments risk checking the 5G box without delivering the innovation, under the hood, that would enable 5G's promise to be realized.
T-Mobile and EchoStar's Boost brand are the only American cell carriers that are 100% 5G Stand-Alone. What's more, in building its Boost network—one of only four national networks, now that US Cellular is winding down—EchoStar has built the only American OpenRAN network.
OpenRAN, which offers cheaper equipment and software-based management at the expense of the tight integration that a single stack vendor can provide. The jury is out on whether OpenRAN will predominate in 5G, but it's a significant factor overseas, with Japan's Rakuten as one notable success. In industrial and public safety deployments, OpenRAN may prove more suitable to non-consumer deployments than traditional consumer-facing systems. And perhaps most significantly, OpenRAN as used by EchoStar excludes Chinese suppliers accused of threatening national security.
Put it all together, and there's only one conclusion. One of the most innovative companies in American telecommunications is at risk of suffering an unprecedented and unpredictable punishment. We're all going to pay a price for it as the effects ramify through the markets, and it's going to hurt our international competitiveness. The FCC should reverse course. If not, China won't have to beat us—we'll have beaten ourselves.
Nathan Simington was nominated to serve as a Commissioner of the FCC by President Donald J. Trump. He was confirmed by the United States Senate in 2020 and served in his position until June 6, 2025.