TAMPA, Fla. — SpaceX has the FCC’s blessing to buy EchoStar spectrum to improve direct-to-device (D2D) services in the United States, subject to a $2.4 billion escrow tied to disputes over the seller’s abandoned terrestrial 5G network buildout.
The regulator said May 12 it would allow the geostationary satellite operator to sell around 115 megahertz of spectrum in separate deals announced last year with SpaceX and AT&T, collectively worth more than $40 billion.
However, EchoStar must also set up the escrow account for claims from infrastructure partners involved in the 5G network its Dish subsidiary abandoned following the spectrum sales.
The condition follows regulatory filings from tower companies and others urging the FCC to ensure Dish honors obligations to infrastructure partners, including by requiring money to be placed in escrow.
EchoStar has argued that an FCC investigation into whether it was underusing spectrum pressured it to sell licenses and abandon the buildout, triggering “force majeure” provisions under certain agreements.
EchoStar also told the FCC it has already reached settlements with hundreds of vendors and made hundreds of millions of dollars in payments.
“The FCC has continuously applauded EchoStar’s spectrum sales to AT&T and SpaceX as pro-competitive transactions that serve the public interest, and we appreciate that the FCC approved them today,” an EchoStar spokesperson said.
“However, these approvals come with an unprecedented involuntary escrow condition. We are analyzing this requirement and evaluating next steps.”
EchoStar declined to comment further.
While the FCC approval clears a major U.S. regulatory hurdle for SpaceX, the transaction faces other approvals and is structured to close in stages.
EchoStar recently said it continues to expect the licenses to fully transfer around Nov. 30, 2027, unless SpaceX chooses to close earlier and cover additional debt-related costs.
The conditional regulatory approval comes soon after the FCC gave AST SpaceMobile permission to provide D2D services in the U.S. with up to 248 satellites. The FCC also recently confirmed exclusive rights in certain Mobile Satellite Service bands, including spectrum SpaceX is acquiring from EchoStar.
“In the coming months, we will be taking additional actions to ensure that companies who want to innovate in D2D have the regulatory framework and spectrum resources to match,” FCC chairman Brendan Carr said.
SpaceX’s deal covers around 65 megahertz of nationwide spectrum, including AWS-4, H-block and unpaired AWS-3 licenses, which the FCC said promises “generational upgrades” for D2D services, “from text-based services to reliable mobile voice and data.”
EchoStar said it expects to receive roughly $22 billion in total from the deal, including up to $11 billion in SpaceX stock and around $2 billion in interim financing to cover payments tied to debt through at least Nov. 30, 2027.
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