Evan Swarztrauber: The ‘Bialystock and Bloom’ Business Model Comes to 5G

By Evan Swarztrauber

Fiction can often foreshadow reality, even in the telecom sector. In “The Producers,” Mel Brooks imagined Bialystock and Bloom making more money from a flop than a hit.

He meant it as satire. Charlie Ergen made it a business model in DISH Wireless.

Over the past two decades, the EchoStar CEO has channeled “The Producers” in his quest to profit from his facade of a mobile wireless network. Starting in 2008, the company began acquiring spectrum licenses—the rights to use public airwaves in exchange for building a service that benefits consumers and the economy.

Instead of investing in a substantial network, the company missed nearly every possible deadline and benchmark imposed by the Federal Communications Commission (FCC) while watching the value of those licenses soar—and taking on debt to keep buying more. The very purpose of those FCC buildout obligations is to curb this “spectrum warehousing,” essentially the hoarding of a scarce public resource for the promise of a future payday on the secondary market.

Unfortunately, Ergen looks set to get that payday. AT&T and SpaceX have proposed to purchase DISH Wireless’s largely unused spectrum licenses for over $42 billion combined. While frustrating, that result is understandable. While the FCC would have been justified in revoking and re-auctioning the licenses, that process can be lengthy and costly due to litigation; the sale would at least ensure those airwaves are put to productive use quickly.

Yet, despite coming close to losing it all, Ergen appears entirely unchastened by this experience. DISH Wireless is now refusing to pay its contractors—the tower builders, climbers, and others who spent billions laying the foundation for DISH’s promised network—while reaping a windfall that should cover those bills.

The company is making outlandish claims to justify its posture. DISH argues that FCC scrutiny over its years of warehousing is force majeure, an unforeseeable event like an “act of God.” In reality, few things in this sector were as foreseeable as that scrutiny; for years FCC observers awaited DISH’s seemingly inevitable comeuppance.

In another nod to Bialystock and Bloom, EchoStar also argues that a meaningless  corporate restructure absolves DISH of its obligations as an FCC licensee. The structure is elegant in its cynicism: the subsidiary that signed the contracts gets none of the money, while the parent entity that collects $42 billion claims it owes nothing. Regulators and the courts shouldn’t abide such an obvious shell game.

Aside from incentivizing bad behavior, allowing DISH to cheat its vendors could have damaging implications for how wireless deployment gets financed going forward—and ultimately slow the pace of American network buildout.

The scale of the potential damage is severe. Total tower company exposure has been estimated at $7 to 10 billion. One major tower company alone is claiming more than $3.5 billion in damages and attributing a 20 percent workforce reduction to DISH’s default. Tower construction employment is already at a 20-year low, and twenty-five small and mid-sized infrastructure providers have warned the FCC about further negative impacts if DISH’s gambit succeeds.

DISH could solve most of this by finding some corporate responsibility and paying its dues.

But the stakes extend beyond DISH. Wireless tower deployment relies on long-term leases that allow tower companies to access capital markets, finance new construction, and offer competitive terms to carriers. If a spectrum licensee can warehouse airwaves for two decades, cash out for $42 billion, and restructure its way out of paying its dues, the risk calculus for every future infrastructure investment changes. Contract terms will shorten. Capital costs will rise. And the pace of 5G and 6G network deployment will slow.

No one wants the FCC to play the arbiter of contract disputes. However, there is a simple remedy here that would guard against the worst fallout from DISH’s intransigence. The agency could require that EchoStar set aside a portion of its proceeds in escrow until contract disputes are handled by the courts. This would not prejudge litigation, but rather ensure the money is actually available if courts order DISH to pay its vendors.

Chairman Carr has admirably championed the telecom workforce throughout his tenure on the FCC, including by promoting apprenticeships and encouraging better relations between contractors and wireless carriers. Conditioning the sale on an adequate escrow would be consistent with Carr’s pro-workforce and pro-deployment “Build America” agenda.

But the agency only has one opportunity—once the sale is complete, all leverage vanishes into the shell.

In “The Producers,” Bialystock and Bloom’s scheme eventually caught up with them. Whether Ergen’s version does depends on what happens in the next few weeks. The Commission can help ensure that the final act of this long-running farce isn’t a $42 billion standing ovation for spectrum warehousing, and a tragedy for America’s wireless leadership.

Originally published in the DC Journal, March 10, 2026: https://dcjournal.com/the-bialystock-and-bloom-business-model-comes-to-5g/

Evan Swarztrauber is a telecommunications policy strategist and a former policy advisor at the Federal Communications Commission. He wrote this for InsideSources.com.