FCC approves $40bn EchoStar spectrum sale to AT&T and SpaceX as tower crisis deepens

The move draws a line under the collapse of America’s most ambitious attempt to build a fourth national mobile operator, while leaving a trail of unpaid tower company contracts worth more than $9 billion.

The FCC gave its approval on May 12, requiring EchoStar to place $2.4 billion in escrow as a condition of the deal, in recognition of ongoing litigation from tower companies alleging the company walked away from billions of dollars in contracted obligations.

Under the terms, AT&T acquires approximately 50 megahertz of nationwide spectrum for $23 billion, comprising 30 MHz of mid-band capacity in the 3.45GHz band and 20 MHz of low-band 600MHz spectrum to accelerate its 5G buildout. The FCC is requiring AT&T to deploy the acquired spectrum significantly faster than the company requested and faster than standard post-auction rules require. AT&T and EchoStar will also establish a hybrid Mobile Virtual Network Operator arrangement to preserve the continued operation of Boost Mobile.

SpaceX acquires 65 megahertz of spectrum for $17 billion, gaining exclusive-use rights to be deployed across terrestrial, space-based and hybrid network architectures.

The FCC granted specific waivers to facilitate SpaceX’s convergence of wireless and satellite broadband, giving Starlink a direct pathway to expand its device-to-device offering in the United States. FCC Chairman Brendan Carr said the approvals, combined with other secondary-market transactions and auctions already in the pipeline, put the US on track to release approximately 300 megahertz of low- and mid-band spectrum by the end of 2027.

The deal marks the end of one of the most prolonged failures in US telecoms history. EchoStar, founded by Charlie Ergen in 1980 and later the parent company of Dish Network, spent more than $13.5 billion accumulating the spectrum it is now selling to AT&T for $23 billion, a gain that comes too late to rescue the company from the consequences of never adequately deploying it.

Dish repeatedly missed 5G buildout milestones stretching back to 2017, triggering an FCC investigation into whether its spectrum licences should be revoked. An attempted sale of its satellite television business to DirecTV collapsed in November 2024 after bondholder opposition, and by mid-2025 EchoStar was reported to be preparing for Chapter 11 bankruptcy.

The collateral damage is substantial. In late 2025, Dish Wireless declared its tower lease agreements “excused” under a force majeure argument, claiming the FCC’s spectrum investigation constituted an extraordinary event that released it from contractual obligations. Tower companies have rejected that argument forcefully.

American Tower filed suit in October 2025, disclosing that Dish accounted for approximately $210 million of its annual US and Canada property revenue. Crown Castle terminated its Dish agreement in January 2026 and is seeking more than $3.5 billion in outstanding payments. SBA Communications has also filed suit.

The $2.4 billion escrow requirement signals that the FCC was not prepared to approve the spectrum transfers without some protection for those creditors. The AT&T transaction is expected to close in mid-2026. The SpaceX closing, covering AWS-4 and H-Block spectrum, is expected around November 2027.

For the broader market, the outcome consolidates spectrum further into the hands of the established US operators and accelerates SpaceX’s ambition to offer direct satellite-to-device connectivity at scale, a capability that has significant implications for mobile coverage, roaming economics and the long-term structure of the global connectivity market.

FCC moves to ease satellite power limits to boost space-based broadband capacity