FCC closes EchoStar probes as spectrum sales reshape D2D race

TAMPA, Fla. — The Federal Communications Commission has dropped investigations into EchoStar as the satellite operator moves to sell spectrum to SpaceX and AT&T in deals totalling more than $40 billion.

EchoStar said Sept. 9 it had received a letter yesterday from FCC chair Brendan Carr, dismissing probes into the company’s 5G buildout obligations and use of terrestrial and Mobile Satellite Services (MSS) AWS-4 spectrum.

The regulator launched the investigations in May, following claims by SpaceX and others that EchoStar had failed to meet 5G network deployment conditions and was leaving valuable frequencies idle.

After floating the possibility of bankruptcy amid the regulatory scrutiny, EchoStar agreed to offload spectrum to AT&T and SpaceX, abandoning bids to operate as a traditional mobile carrier and a direct-to-device (D2D) constellation in the process.

While EchoStar still needs FCC permission for both transactions, Carr’s letter suggests clearance is likely.

SpaceX said Sept. 8 it plans to use the MSS spectrum to improve a D2D network that currently relies on cellular airwaves from terrestrial partners like T-Mobile in the U.S, where rival AST SpaceMobile is also pursuing satellite spectrum.

SpaceX is spending $17 billion in cash and stock for the frequencies, and also plans to make about $2 billion in cash interest payments on EchoStar debt through November 2027.

William Blair analyst Louie DiPalma speculated that SpaceX could launch a standalone cellular service as a bundle with its Starlink Ku-band satellite broadband offering, partnering with T-Mobile for indoor coverage where cellular signals from satellites are weak.

DiPalma said such a move “would have potential to improve the return on investment” on one of SpaceX’s largest acquisitions to date.

Still, user adoption remains unclear as T-Mobile only started charging subscribers in July for a Starlink-enabled T-Satellite service offering texting and multimedia messaging for $10 per month. Upgrades are underway to add location services, access to X and limited voice and video through WhatsApp.

“With the additional 50 MHz of spectrum, Starlink estimates that its second-generation direct-to-device service will have 20 times the throughput to the user compared to its current-generation service,” DiPalma continued.

“This should enable the service to be closer to the 5G service that terrestrial cellular networks currently offer.”