Myths vs. Facts

EchoStar, the parent company of DISH Wireless, decided to sell its spectrum for a hefty profit, but the entire wireless ecosystem could pay the price. If EchoStar has its way the great American companies that built DISH Wireless—tower operators, contractors, fiber providers, as well as local governments—will be out an estimated $7-$10 billion while EchoStar brings in nearly $50 billion.

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Myth #1: EchoStar’s spectrum sale created a force majeure.

Fact: The spectrum sales were a voluntary business decision made to maximize EchoStar’s profit, not an unforeseeable event making it impossible for DISH to continue wireless network operations. FCC review is routine and foreseeable, and the FCC did not order EchoStar to sell its licenses. The company chose to sell for a payout of over $40B.

Myth #2: EchoStar and DISH are completely separate entities so auction proceeds to EchoStar are unavailable to pay the obligations of DISH.

Fact: On the contrary, DISH is a direct and wholly-owned subsidiary of EchoStar and both are controlled by EchoStar CEO Charlie Ergen.

Myth #3: Infrastructure providers made existing infrastructure available to DISH rather than building new infrastructure, so there is no harm.

Fact: Providers invested capital and labor to support DISH’s direct new buildout and colocation on existing infrastructure, including towers and rooftops.  This required site development, engineering studies, construction/structural work, installations and ongoing operations/maintenance and management.  Infrastructure providers took on these expenses based on long-term commitments. Additionally, DISH has not removed its equipment, further tying up valuable real estate and requiring hundreds of millions of dollars in removal and restoration decommissioning expenses.

Myth #4: The FCC should not get in the middle of contract disputes between companies.

Fact: The issue is primarily about a transaction-specific harm caused by EchoStar’s proposed spectrum sale. That is, there would have been no contractual issue if EchoStar had not chosen to opportunistically sell its spectrum and attempt to use the FCC as the stated basis for nonpayment.

Myth #5: The FCC can’t solve this problem.

Fact: In spectrum transfer and merger reviews, the FCC can impose conditions to resolve transaction-specific public-interest harms without adjudicating the merits of specific contract disputes. Any remedy would be narrowly tied to these transfer applications—not a new FCC role in “unrelated” private disputes. The FCC has precedent to attach transaction-specific conditions to prevent abuse of FCC processes and protect the public interest.

Myth #6: The FCC has never required the establishment of escrow accounts.

Fact: The FCC has created escrow accounts in numerous contexts; this is not a novel expansion of FCC jurisdiction.

Myth #7: It would be bad precedent for the FCC to get involved with contract disputes in a spectrum transaction.

Fact: The circumstances giving rise to DISH—a merger transaction that provided it significant market advantages backed by the Department of Justice—are unlike any other license transaction that could appear before the FCC. FCC action is appropriate here but of limited future applicability.

Myth #8: Infrastructure providers should have known better than to get involved with Charlie Ergen and DISH.

Fact: Providers contracted in good faith to support the first Trump Administration’s explicit goal of standing up a fourth nationwide, facilities-based carrier. The concern is not “buyer beware”—it’s using FCC proceedings and structuring to avoid obligations while monetizing spectrum.

Myth #9: The FCC is encouraging companies to meet in the middle and settle disputes, which is a better solution than transaction conditions.

Fact: The FCC has heard industry concerns and understands what is at stake. We welcome the FCC facilitating the opportunity for reasonable agreement before approving the transaction and Coalition members stand ready to have those discussions.

Myth #10: The American Wireless Builders Coalition is just trying to slow down the EchoStar spectrum sales.

Fact: Coalition members support the sale and putting scarce spectrum resources to good use. The FCC can include an escrow account as a condition of its approval and make sure all parties are protected while swiftly completing the transactions.