The Federal Communications Commission approved EchoStar's $40 billion sale of spectrum licenses to AT&T and SpaceX on Thursday, transferring critical airwaves that will expand 5G networks and satellite-to-phone services across the United States. The decision, announced by FCC Chairman Brendan Carr, cements a deal he effectively forced after threatening to revoke the licenses last year. EchoStar immediately signaled it may challenge a condition requiring it to set aside $2.4 billion for construction firms that say they were never paid.
AT&T is set to acquire 30 MHz of nationwide spectrum in the 3.45 GHz band and 20 MHz in the 600 MHz band. The purchase gives the telecom giant new mid-band and low-band options for its 5G and fixed wireless networks. SpaceX is buying 65 MHz of nationwide licenses between 1.695 GHz and 2.2 GHz.
That spectrum will boost the Starlink direct-to-device service currently available for T-Mobile phones. The price tags are enormous. AT&T agreed to pay $23 billion.
SpaceX committed $17 billion. Ars Technica reported the combined $40 billion figure on May 15, 2026. Here is what the study actually says—or rather, what the FCC orders reveal.
The agency's Wireless Telecommunications Bureau and Space Bureau issued the approvals. The outcome was widely expected. Chairman Carr had made his position unmistakably clear months earlier.
The backstory is blunt. Carr objected to a network deployment deadline extension that Dish Network, an EchoStar subsidiary, received from the Biden-era FCC. SpaceX then alleged that Dish "barely uses" the spectrum to provide mobile service to American consumers.
Carr threatened revocation. EchoStar, led by Charlie Ergen, responded by striking the two sales. That timeline concerns rural carriers.
The Rural Wireless Association criticized the approvals in a statement Ars Technica obtained. "The spectrum sales continue the troubling pattern of spectrum aggregation that disadvantages rural wireless providers, stifles competition in the wireless marketplace, and hinders the deployment of wireless services—particularly in the hardest-to-serve rural areas," the group said. The association went further. It argued the FCC's Wireless Telecommunications Bureau "erroneously asserts that the likelihood of competitive harm is low, dismissing concrete harms identified by rural wireless carriers, including reduced access to spectrum needed to expand service in rural markets and diminished competitive opportunities for rural and regional wireless providers."
A small window remains. The Rural Wireless Association noted that EchoStar could still sell some spectrum licenses to smaller carriers in future deals. Boost Mobile will survive.
The EchoStar subsidiary will continue providing wireless service, but over AT&T's network rather than its own. EchoStar had to scale back its own network-construction plans to resolve the FCC's complaint. The escrow fight is now the main event.
The FCC imposed a condition requiring EchoStar to fund a $2.4 billion escrow account. That money would compensate construction companies, tower firms, and fiber backhaul providers who say EchoStar refused to pay for building the Dish network. The FCC's order acknowledged the unusual circumstances.
The agency said the docket drew comments "alleg[ing] that EchoStar has told various tower companies, fiber backhaul providers, and construction firms that it will not fulfill its contracts nor pay the monies it owes them for constructing that radio network." Those companies asked the FCC to impose the escrow requirement so they could be paid from the spectrum sale proceeds. EchoStar disputes those claims. The company told the FCC it "has reached settlements with hundreds of vendors and made hundreds of millions of dollars of payments." EchoStar argued that "any escrow condition is illegal and unmanageable."
The FCC was not swayed. It acknowledged playing a "unique role in the underlying series of events," creating "a precedentially novel fact pattern and cognizable public-interest harms specific to this transaction that we find necessary to resolve here." The agency said the condition allows "the relevant parties and, if necessary, courts or other bodies, to adjudicate or settle these issues."
EchoStar's response was measured but pointed. "The FCC has continuously applauded EchoStar's spectrum sales to AT&T and SpaceX as pro-competitive transactions that serve the public interest, and we appreciate that the FCC approved them today," the company said. "However, these approvals come with an involuntary escrow condition. We are analyzing this requirement and evaluating next steps."
That language matters. "Evaluating next steps" is corporate code for considering legal action. Carr framed the decision in political terms. "Thanks to President Trump, America is leading the world again in next-gen technology," he said in his official statement. "As a result of President Trump's work, Americans are now going to see faster Internet speeds, stronger competition, and innovative new offerings, including high-speed connections right to your smartphone from space—providing ubiquitous connectivity when these new systems are complete."
AT&T has already begun deploying the spectrum. The company previously received special authority to use EchoStar's 3.45 GHz airwaves while the sale was pending. AT&T confirmed it has deployed the mid-band spectrum to boost network capacity.
It will deploy the low-band frequencies after closing the purchase. AT&T expects to complete the deal in mid-2026. The SpaceX transaction follows a more complex path.
The licenses will transfer first to a trust held for SpaceX's benefit. Later, they move from that trust to SpaceX itself. The companies say the two-step process is necessary to obtain regulatory approvals outside the United States.
The final step is expected by November 30, 2027, but could happen earlier. Starlink is not a traditional wireless carrier. But it is positioning itself to dominate the emerging market for Direct-to-Device systems.
These use low Earth orbit satellites to provide service on standard mobile phones. The spectrum purchase gives SpaceX the airwaves it needs to scale that ambition. Meanwhile, AT&T's acquisition continues a long-running trend.
Spectrum keeps consolidating with the three major carriers—AT&T, Verizon, and T-Mobile. Small and rural operators watch from the sidelines. Why It Matters: The $40 billion transaction reshapes who controls the invisible infrastructure of American mobile connectivity.
AT&T gains spectrum to compete more aggressively in 5G and fixed wireless. SpaceX gets the airwaves to make satellite-to-phone service a mainstream reality. Rural carriers lose another round in the spectrum aggregation fight.
And the $2.4 billion escrow dispute will test whether the FCC can force a company to set aside money for contractors it may or may not owe. Key Takeaways: - The FCC approved EchoStar's $40 billion spectrum sale to AT&T ($23 billion) and SpaceX ($17 billion), reshaping US wireless and satellite markets. - EchoStar may challenge a $2.4 billion escrow condition meant to compensate construction firms that claim they were not paid for building the Dish network. - Rural wireless carriers criticized the approvals, arguing spectrum consolidation harms competition and rural deployment. - AT&T expects to close its deal by mid-2026; the SpaceX transaction involves a two-step trust process that could extend into late 2027. The escrow fight will determine the deal's final shape.
EchoStar must decide whether to accept the condition or take the FCC to court. That legal question—whether the agency can impose an "involuntary escrow" on a transaction it also calls pro-competitive—has no clear precedent. The construction companies awaiting payment will be watching.
So will every telecom lawyer who structures future spectrum deals. The AT&T closing is months away. The SpaceX trust transfer has years to run.
But the escrow battle starts now.
Key Takeaways
— - The FCC approved EchoStar's $40 billion spectrum sale to AT&T ($23 billion) and SpaceX ($17 billion), reshaping US wireless and satellite markets.
— - EchoStar may challenge a $2.4 billion escrow condition meant to compensate construction firms that claim they were not paid for building the Dish network.
— - Rural wireless carriers criticized the approvals, arguing spectrum consolidation harms competition and rural deployment.
— - AT&T expects to close its deal by mid-2026; the SpaceX transaction involves a two-step trust process that could extend into late 2027.
Source: Ars Technica
