EchoStar delays bankruptcy threat after Trump pushes for FCC resolution

TAMPA, Fla. — EchoStar has delayed a potential bankruptcy filing to allow more time for talks with regulators reviewing whether the U.S. satellite operator is complying with conditions tied to its spectrum licenses.

The company said June 26 it would make overdue interest payments on its debt within a 30-day grace period, after withholding them earlier this month amid uncertainty over its standing with the U.S. Federal Communications Commission.

However, EchoStar also said it will not make debt interest payments of around $114 million due July 1, triggering another 30-day grace period to avoid default as the regulatory uncertainty persists.

The operator is effectively “pushing off a Chapter 11 filing to provide adequate time to reach an agreement with the FCC while signaling that they will still file if they can’t come to terms with the agency,” said Jonathan Chaplin, an analyst at NewStreet Research.

The FCC is reviewing compliance with terrestrial network buildout obligations in the AWS-4 band, as well as EchoStar’s use of adjacent 2 gigahertz spectrum for satellite services.

In April, a month before the FCC began making inquiries for its probe, rival SpaceX said its satellite data showed EchoStar had failed to meet a 70% 5G buildout requirement in the AWS-4 band by the FCC’s Dec. 31, 2023, deadline. EchoStar denies the claim.

In a June 26 regulatory filing, EchoStar said U.S. President Donald Trump had recently encouraged the parties involved to reach an amicable resolution.

However, “no such resolution has been achieved, and it is possible that no such resolution will ultimately be achieved,” the company added.