FCC angers small carriers by helping AT&T and Starlink buy EchoStar spectrum

The Federal Communications Commission (FCC) approved the sale of EchoStar’s spectrum licenses to AT&T and SpaceX’s Starlink in deals totaling $40 billion. The approvals follow FCC Chairman Brendan Carr’s pressure on EchoStar to sell the licenses after SpaceX accused EchoStar’s Dish Network of underutilizing the spectrum. AT&T will acquire 50 MHz of spectrum across the 3.45 GHz and 600 MHz bands to enhance its 5G and fixed wireless networks, while SpaceX will purchase 65 MHz in the 1.695 GHz to 2.2 GHz range to expand Starlink’s satellite-based mobile service compatible with T-Mobile phones. The transactions come amid controversy, as EchoStar objects to an FCC condition requiring it to fund a $2.4 billion escrow account to compensate construction companies involved in building the Dish network. EchoStar’s Boost Mobile will continue operations using AT&T’s network and will gain access to Starlink’s mobile network through a partnership with SpaceX. The deals mark a significant shift in spectrum ownership, with AT&T consolidating its holdings alongside Verizon and T-Mobile, intensifying concerns about market concentration. Rural wireless providers have strongly criticized the FCC’s decision, arguing that the spectrum sales exacerbate challenges for smaller carriers by limiting their access to essential spectrum, particularly in underserved rural areas. The Rural Wireless Association contends that the approvals undermine competition, hinder wireless service deployment in hard-to-serve regions, and perpetuate a trend of spectrum aggregation favoring major carriers. Although Starlink is not a traditional wireless carrier, its ambitions in the emerging Direct-to-Device satellite market position it as a key player in future mobile connectivity. The FCC’s move reflects ongoing tensions between regulatory efforts to promote efficient spectrum use and the need to maintain competitive balance in the wireless industry. The outcome of EchoStar’s potential legal challenge to the escrow requirement and the broader impact on rural wireless competition remain closely watched by industry stakeholders.