The FCC has approved EchoStar's revised 5G buildout plan. Rapid approval indicates the FCC is willing to act quickly to improve Dish's success as a fourth US facilities-based competitor, an analyst said.
The Federal Communications Commission (FCC) wasted no time granting EchoStar's request to extend the deadline for portions of its 5G network buildout into 2026 in exchange for several commitments, including a low-cost offering and a pledge to accelerate buildouts in certain markets.
EchoStar announced Friday that the FCC approved the request (PDF), which was sent to the commission on September 18.
EchoStar, which is facing a bondholder lawsuit tied to its combination with Dish and a possible plunge into bankruptcy if it fails to resolve $2 billion of debt maturing on November 14, is building an open RAN 5G network that aims to establish the company as a fourth national carrier (alongside AT&T, T-Mobile and Verizon). Dish's request seemed to make clear that its 2025 deadlines were in jeopardy even if the company could resolve its near-term debt wall.
Update: On Monday, EchoStar disclosed in an 8-K that its negotiations with certain holders of senior debt securities had concluded without reaching an agreement regarding potential transactions, including new secured notes with an extended maturity date. "The Company remains engaged with various other parties regarding possible financing transactions," EchoStar said in the filing.
"The failure to resolve the lawsuit limits Dish’s capital raising options, but they still have options. We believe the most likely path to raising capital will be notes secured by the AWS-3 licenses," New Street Research analyst Jonathan Chaplin said in an emailed note about the new filing.
Dish commitments
In exchange for the FCC waiver, EchoStar pledged to fulfill a range of commitments, including a plan to cover more than 80% of the US population with its open RAN network at the end of 2024. The company, which has MVNO partnerships with AT&T and T-Mobile, said it will also accelerate and expand its final buildout milestones in more than 500 license areas on that same timeline.
EchoStar said it's also prepared to introduce a nationwide "affordable" 5G plan that will offer at least 30 gigabytes of data per month for no more than $25 per month for both prepaid and postpaid customers.
EchoStar also pledged to deploy 24,000 towers by June 14, 2025 – about 9,000 more than its 15,000 2023 tower obligation, and to offer to load at least 75% of new customers with compatible devices on its MVNO network in the aforementioned accelerated markets.
Speedy approval
In a research note issued Friday, Blair Levin, a policy analyst at New Street Research and a former FCC official, remarked at the speed at which the FCC approved the petition.
"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," he explained. "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 believes a vote is "highly unlikely" if there are three Commissioners willing to push this forward.
"The Bureau has not yet issued the order but as far as we can tell, they simply approved the order. The speed at which the Bureau acted suggests to us that this was pre-negotiated, meaning that the Bureau order is unlikely to make changes," he added.
Levin noted that the FCC action could face a lawsuit, but does not expect anyone willing to spend the political capital to pursue one.
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