EchoStar to sell wireless spectrum licenses to AT&T in $23 billion deal

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By David Shepardson and Harshita Mary Varghese

WASHINGTON (Reuters) -EchoStar has agreed to sell wireless spectrum licenses for $23 billion to AT&T as it faces scrutiny from government regulators and after President Donald Trump urged a deal.

In June, Trump prodded satellite communications and Dish TV parent EchoStar and Federal Communications Commission Chair Brendan Carr to reach an amicable deal over the fate of the company’s wireless spectrum licenses, the company said earlier.

In May, the FCC told EchoStar it was investigating the company’s compliance obligations to provide 5G service in the United States, questioning EchoStar’s buildout extension and mobile-satellite service.

Democratic FCC Commissioner Anna Gomez raised questions about the agency’s role.

“Rather than serving as a neutral regulator, it once again mounted a pressure campaign on a private company, putting the agency’s thumb on the scale in ways that risks distorting the wireless marketplace to the detriment of consumers,” she said Tuesday.

An FCC spokesperson said the agency appreciates “the productive and ongoing discussions with the EchoStar team. The FCC will continue to focus on ensuring the beneficial use of scarce spectrum resources.”

The Justice Department’s Antitrust Division said it had been coordinating with the FCC on the review and will exercise its jurisdiction as appropriate “to maximize the benefits to American consumers.”

The deal marks the latest major investment by AT&T to accelerate its fiber and 5G network build-out as the wireless market saturates and internet usage surges.

Shares of EchoStar closed up 70%, while AT&T shares fell by 0.6%

Trump met on June 12 with EchoStar Chair Charlie Ergen and later called Carr to take part in the meeting. EchoStar had been seeking to shield its cache of wireless spectrum licenses from the threat of revocation by the FCC.

EchoStar said the AT&T deal is part of its ongoing efforts to resolve the FCC’s inquiries.

“This transaction puts our business on a solid financial path,” said EchoStar CEO Hamid Akhavan, adding it continues to evaluate strategic opportunities for its remaining spectrum portfolio.

U.S. satellite TV provider DirecTV terminated its agreement to acquire EchoStar’s satellite television business last year, which includes rival Dish TV, over a failed debt-exchange offer.

In May, AT&T clinched a deal to acquire Lumen Technologies’ consumer fiber operations for $5.75 billion in cash.

AT&T’s bundled plans that combine high-speed fiber with mobile offerings have resonated well with customers as rivals like T-Mobile and Verizon double down on promotions.

The companies also agreed to expand their network services agreement, enabling EchoStar to operate as a hybrid mobile network operator providing wireless service under the Boost Mobile brand. AT&T will be the primary network partner. 

(Reporting by Harshita Mary Varghese in Bengaluru and David Shepardson in Washington; Editing by Nick Zieminski and Stephen Coates)