You can blame Elon Musk and the internet.
That sentence applies to a lot of things. The internet and the controversial billionaire have caused all sorts of problems, but they have also solved a lot of them,
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You can thank the internet for making the high school reunion pretty much irrelevant and for making it really easy to hear unqualified people offer their opinions on everything.
Musk has also done some good things including pioneering electric cars, finding a new way to tunnel under cities cheaply, and creating SpaceX, which developed Starlink Internet. You may not care about billionaires traveling to Mars, but anyone on a cruise, people who live in remote areas, and folks who live in Internet desserts greatly appreciate Starlink.
Starlink and the internet, however, ruined the satellite cable and internet business. Musk’s internet service works better than the traditional satellite option sold by EchoStar’s Dish and rival DirectTV. That allows people to get Starlink and used streaming cable services like YouTube Live, Hulu Live, Fubo, Sling,and various streaming options offered by traditional cable companies.
That left EchoStar, a company heavily invested in satellite internet and cable, in a bad place. The company, however, does have a lot of assets and it may take a bold step to protect those assets.
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EchoStar faces FCC pressure
While EchoStar has seen its core businesses deteriorate, it has tried to diversify its business by buying Boost Mobile. The company also owns a number of assets in spectrum licenses.
The problem is that those licenses come with promises to build out various networks. The Federal Communications Commission (FCC) does not believe EchoStar has met those requirements.
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In September 2024, EchoStar celebrated that it had reached a deal with the FCC that would allow it to make progress in the wireless market.
“Today the FCC took a significant step to promote competition in the wireless market by granting 5G network buildout framework. The updated framework enables to optimize and enhance its coast-to-coast buildout of the world’s first cloud-native Open RAN 5G Boost Mobile Network, while more efficiently deploying the network in new areas of the country,” the company shared in a Sept. 20, 2024 press release.
The company was confident that it could build out an impressive network that benefits the American consumer:
Enhancing Network Build. By the end of this year, Boost Mobile Network will cover 80% of the population, an additional 30 million more Americans than 2023 obligation to cover 70% of the population. will also accelerate and expand its final buildout milestones in more than 500 license areas on this same timeline. Requiring a Low-Cost Offering. EchoStar will make a low-cost wireless plan and 5G device available to consumers nationwide, regardless of whether they live in an area where has built out its Boost Mobile Network or relies on roaming partners to provide service.Enabling a More Efficient Build. The targeted extensions adopted by the FCC will provide a construction timeline that more closely aligns deployment with its 3.45 GHz spectrum licenses, reducing the resources necessary to install infrastructure twice at each cell site/tower.
“The pricing and innovation improvements from continued presence in the wireless market is a win for all American consumers,” the company added.
EchoStar considers Chapter 11 bankruptcy
The FCC’s approval of EchoStar’s wireless spectrum purchases included a timeline for constructing its network. The satellite company has not met those deadlines and the federal agency may come after its very valuable spectrum licenses.
“The U.S. Federal Communications Commission recently began reviewing EchoStar’s compliance with terrestrial buildout obligations in the AWS-4 band, as well as its use of adjacent 2 GHz spectrum for satellite services,” SpaceNews.com reported. “The investigation follows pressure from rivals such as SpaceX, which in April claimed data from its Starlink broadband satellites showed the company had not satisfied a 70% buildout commitment in the AWS-4 band by the FCC’s Dec. 31, 2023, deadline.”
EchoStar, in advance of a potential Chapter 11 bankruptcy filing. has skipped two key interest payments. The satellite company, it should be noted, denies that it has not met its FCC obligations.
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“This uncertainty over our spectrum rights has effectively frozen our ability to make decisions regarding our Boost business,” EchoStar shared in a regulatory filing, “including continued network buildout and adversely impacts our ability to implement and adjust our overall business plan and requires us to re-evaluate the deployment of our resources.”
The company skipped a May 30 $326 million interest payment and the skipped a June payment on various loans to its Dish brand.
Each payment has a 30-day grace period. Once those end, the company would likely face a voluntary Chapter 11 bankruptcy filing.
