Few businesses have presented more of a paradox than EchoStar. On the one hand, it had a portfolio of largely fallow wireless licenses from the Federal Communications Commission worth many tens of billions of dollars. On the other hand, it hemorrhaged cash, had approximately $24 billion of debt at high interest rates, and teetered on the brink of bankruptcy with seemingly no possible escape?
In the past few months, a miraculous escape was found, and EchoStar went from Skid Row to the Yellow Brick Road. What happened?
EchoStar was ultimately bailed out by an unlikely hero: Chairman Brendan Carr of the FCC. It is a story worth telling.
Consider how EchoStar got into trouble in the first place. EchoStar and its affiliate Dish were founded by Charlie Ergen in the late 1980s, a visionary east Tennessean who, on a shoestring budget, built a multibillion satellite television business in less than a decade.
Over the years, Ergen invested heavily in FCC licenses because, as he accurately foresaw, they increased in value far more than inflation. EchoStar and Dish were active participants in FCC auctions and engaged in other transactions to amass a vast portfolio of FCC licenses. Over the years, major wireless companies allegedly flirted with buying the portfolio. But no one bought, and only a few licenses were even leased at below market rates, if at all.
Eight years ago, EchoStar faced two great challenges. First, Dish’s once highly successful direct broadcast satellite business became unprofitable as consumers shifted to broadband at home.
Second, T-Mobile and Sprint merged, reducing the number of potential buyers of EchoStar’s spectrum portfolio from four to three.
To complicate matters, as part of the Department of Justice’s approval of the T-Mobile-Sprint transaction, Ergen negotiated with T-Mobile to acquire its prepaid wireless business and a small portfolio of FCC licenses in return for a promise to DOJ to become a fourth wireless carrier and to build a fourth wireless network in the United States.
Trouble loomed on the horizon. Many of EchoStar’s FCC licenses had buildout requirements for network completion in the early 2020s, and to meet those buildout requirements would require costly investments and carefully planned execution.
Even more troubled loomed as EchoStar bravely entered the wireless services market. The competitors were AT&T, Verizon, and T-Mobile, each with more than 100 million customers, more than $10 billion in annual cap-ex, and ubiquitous wireless networks and customer awareness across America. EchoStar had only a few customers, no network, and substantial debt. It had limited resources to build a nationwide network, much less one that could compete effectively with the Big Three wireless companies.
Few people thought EchoStar would meet its commitment to compete effectively with the Big Three. It did not. In many ways, EchoStar seemed trapped with no possible escape.
In early 2025, Brendan Carr became Chairman of the FCC. At first, he hardly seemed to be the hero who would rescue EchoStar. He investigated whether EchoStar had met some of its buildout requirements and threatened to revoke some of EchoStar’s licenses.
The threat of license revocation, which at first appeared to be an existential threat to EchoStar, led to a series of events that saved EchoStar. Chairman Carr’s threat had the wisdom of Solomon. In the Book of Kings, Solomon’s mere threat of splitting a baby revealed who was actually interested in the welfare of the baby.
Chairman Carr’s threat of revoking EchoStar’s licenses revealed who was interested in helping EchoStar avoid bankruptcy, which likely would have eventually happened even without Carr’s threat. President Trump weighed in asked everyone to “Find a deal.”
With the imprimatur of the Administration behind finding a deal, Chairman Carr and Ergen found not one but several deals.
With Chairman Carr clearly in a deal-approving mode, businesses that had shunned EchoStar in the past started lining up to find deals. AT&T bought some of the EchoStar spectrum for $23 billion with an eager anticipation of putting it to work expeditiously. SpaceX purchased terrestrial wireless spectrum for $17 billion with hopes of connecting ordinary cell phones with satellite service.
More deals are likely in the works. It turns out: Chairman Carr could get deals done that Charlie Ergen could not get done on his own.
Practically everyone wins from this series of deals. EchoStar bondholders, who two months ago were looking over a cliff at bankruptcy, now find their bonds have full value. EchoStar equity holders are even better off.
For years, much of the vast portfolio of EchoStar spectrum has sat inactive. No more. AT&T and SpaceX have plans to put spectrum to use soon. The American public will benefit with access to new services.
Rather than slowly sliding into bankruptcy, which seemed all too likely in late 2024 and early 2025, EchoStar is financially healthier than it has been in many years.
Investors in wireless spectrum are perhaps the biggest winners. The spectrum valuations associated with the AT&T purchase and the SpaceX purchase were higher than expected.
That is good news for any business that has invested in spectrum. And it is good news for the federal government which hopes to raise tens of billions of dollars in spectrum auctions in the coming years. And it is good news for the American consumer who has benefited enormously from wireless innovations over the past few decades. The promise of new wireless innovations is far from over.
And that is the story of how one company, EchoStar, went from Skid Row to the Yellow Brook Road.
