Dish's parent company, EchoStar, is seeking a waiver from the FCC that will extend the deadline for its 2025 5G network buildout commitments. In exchange, the company is proposing several new commitments, including accelerated deployments in certain markets.
EchoStar, the parent company of Dish, has asked the FCC for more time to fulfill its 5G buildout plan in exchange for a pledge to accelerate deployments in some markets, among several other commitments.
Citing unanticipated global events that are beyond EchoStar's control (some of it certainly stems from EchoStar's coming debt wall), the company has asked for a waiver and an extension of time to meet its 2025 5G network construction milestones for a subset of its wireless licenses.
The licenses subject to the requested waiver include EchoStar's AWS-4, Lower 700MHz E Block, 600MHz, AWS-3, AWS H Block and AWS-3 licenses. Depending on the spectrum, EchoStar generally is asking to move the milestones to December 2026. EchoStar also wants final construction milestones moved from December 14, 2026, to June 14, 2028.
EchoStar argued in its September 18 FCC filing that its proposed extension framework will help it provide a "competitive facilities-based service to more consumers nationwide" along with lower prices via the company's emerging open RAN-based 5G network.
Accelerated builds and 'affordable' 5G
In exchange for the waiver, EchoStar has outlined several new commitments:
EchoStar's open RAN network will cover more than 80% of the US population at the end of 2024, representing 30 million more points of presence than its 2023 70% commitment;
The "final Milestones" for more than 500 EchoStar licenses will be accelerated in certain markets;
EchoStar will offer a nationwide "affordable" 5G plan and device to consumers – an offer of at least 30 gigabytes of data per month for no more than $25 per month for both prepaid and postpaid customers. Customers can bring their own certified device or buy one that is certified for EchoStar's 5G network at a cost of no more than $125;
The company will deploy 24,000 towers by June 14, 2025 – roughly 9,000 more than its 15,000 2023 tower obligation;
EchoStar's network will be 3GPP Release 17-compliant by June 14, 2025 (that release adds new capabilities such as wideband mobile satellite services and will give customers access to network technology that is two releases ahead of EchoStar's existing commitment);
EchoStar also has offered to load at least 75% of new subs with compatible devices on its MVNO network in the accelerated markets; and
Small carriers and tribes will have the ability to lease EchoStar's spectrum in the license areas subject to an extension.
EchoStar reasons that it will still be able to offer a nationwide wireless service thanks to its roaming deals with AT&T and T-Mobile, but will also be able to sign up customers with competitive pricing and plans enabled by its "enhanced presence" in the accelerated buildout markets.
"This pro-consumer outcome is in addition to the public interest commitments EchoStar is making in connection with its extension request," EchoStar told the FCC.
Debt coming due
EchoStar didn't specify the reasons behind the request. However, the company is facing a cash crunch.
EchoStar has $2 billion of debt maturing on November 14 and has previously said it does not have the necessary cash on hand to fund Q4 operations or the coming debt maturity. However, execs have expressed confidence that the company will be able to refinance its coming debt obligations or tap into its valuable spectrum holdings as collateral to avoid a potential fall into bankruptcy.
In March, Dish CEO Hamid Akhavan said that the 2025 5G milestone was within reach if the company managed to resolve its funding gap.
Some interpreted that to mean that the US Department of Justice (DoJ) and the FCC would not get the mobile competition they wanted in allowing the T-Mobile/Sprint deal to proceed.
But a "better interpretation is that he was saying that the fourth competitor could bring those benefits, but that FCC buildout metrics will force wasteful investments," New Street Research policy analyst and former FCC official Blair Levin explained today in a research note. "That is, he [Akhavan] was saying that covering 75% of every license area is a wasteful metric for Dish's wireless business as a start-up, as it forces incurring capex and opex into areas with no traffic just to keep licenses."
Levin said public comments will help to determine what the FCC might do. While "there will be some muttering" from ISPs about Dish not keeping its commitments, he said he's likewise "skeptical that they will spend significant political capital opposing the Dish request."
Levin noted that EchoStar's proposal could get some static from Elon Musk because Starlink, Musk's broadband satellite company, has been battling with Dish on spectrum-related issues.
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