- Dish parent EchoStar has met previous buildout commitments, but its financial situation is grim
- The buildout extension comes with a promise from EchoStar that it will make a low-cost wireless service plan and 5G device available to consumers nationwide
- The FCC decision was possibly a speed record for the agency
And just like that, the FCC granted Dish parent company EchoStar’s request for more time to meet 5G buildout requirements in exchange for accelerated deployments in certain markets and other commitments.
The approval appears to have come in near record time as the FCC typically isn’t known for quick decision-making, to put it mildly. EchoStar submitted its request to the FCC on Tuesday and the application was granted by Friday.
The approval basically means EchoStar’s construction milestones for four spectrum blocks (AWS-4, lower 700 MHz E, 600 MHz and AWS H) will extend to December 14, 2026, instead of the previous deadline of June 14, 2025. For the AWS-3 licenses, those construction milestones extend to December 2026 instead of October 27, 2025, and overall final construction milestones will extend to June 14, 2028, instead of December 14, 2026.
In its request to the FCC, EchoStar didn’t mention that the company desperately needs to raise capital before $2 billion in debt comes due in November, which is why no one was particularly surprised when the company asked for more time to meet expensive 5G network buildout requirements. Analysts have been speculating for months about EchoStar’s chances of filing for bankruptcy.
Fast times at Ridgemont High the FCC
Fierce asked the FCC how the application received such a quick approval but we didn’t get a straight answer. EchoStar didn’t release any statement beyond a press release.
In a research note earlier this week, New Street Research analyst and former FCC official Blair Levin predicted the FCC would grant the extension, in part because failing to do so could later be construed as being one of the causes for a wireless competitor to fail, “with the knowledge that Dish is likely the last, best hope of a fourth facilities-based mobile competitor.”
“The speed at which the Bureau acted suggests to us that this was pre-negotiated,” meaning that the FCC likely didn’t change what EchoStar submitted to the agency, Levin said in a follow-up note for investors today.
As for whether this is the fastest FCC approval of a petition ever done, he said: “We can’t think of a faster one. And it is a real tribute to the brilliant strategy and execution by the Dish public policy team.”
“The speed at which the FCC acted – albeit likely with significant pre-negotiation – is an indication that the FCC leadership is willing to act quickly and decisively to increase the odds of Dish succeeding in building out a fourth national facilities-based competitor,” Levin said. “We think that is consistent with our view that the FCC was more likely than not to approve a deal.”
Moving targets
Included in EchoStar’s request to the FCC was a full list of commitments, including that EchoStar’s open Radio Access Network (RAN) will cover more than 80% of the U.S. population by the end of 2024 and that EchoStar will offer a nationwide affordable 5G plan and device to consumers.
EchoStar also pledged to deploy 24,000 towers by June 14, 2025 — which represents 9,000 more towers than its 15,000 2023 tower obligation — and that EchoStar’s network will be 3GPP Release 17 compliant by June 14, 2025. Additionally, EchoStar will load at least 75% of new subscribers with compatible devices on its own mobile network in certain “Accelerated Markets” and small carriers and tribes will be able to lease EchoStar’s spectrum in the license areas subject to an extension.
High hill to climb
Consumer advocacy groups took the FCC decision as a positive move.
“As consumer advocates, we agree the FCC should give Dish every opportunity to deploy and become a meaningful mobile market competitor,” said Michael Calabrese, director, Wireless Future at the Open Technology Institute at New America, in a statement. “The public interest conditions attached to the extension seem both positive and unprecedented.”
Calabrese added: “Building a nationwide mobile network from scratch is a high hill to climb, and Dish deserves every benefit of the doubt as it tries to overcome numerous obstacles, some of them unanticipated years ago."
Recon Analytics analyst Roger Entner told Fierce over a year ago that he expected Dish to ask for more time to meet its 2025 buildout deadline as it requires covering harder-to-reach rural areas that require more capital and densification.
“What this does is it maintains that in urban markets, there’s a fourth facilities-based” operator, but “it dramatically weakens the proposition that in rural areas, there is an additional facilities-based competitor,” he told Fierce today.
In those more rural areas, Dish can use the networks of MVNO partners AT&T and T-Mobile to serve customers.
“The purpose of this is to allow Dish to not spend as much money as they would have had to otherwise do,” he said. And what about its longer term prospects? “I think they will go bankrupt either way,” but he’s not making any predictions on when that might happen. “They’re trying to extend their lifeline.”