AT&T and EchoStar: Deal Fixes Spectrum Needs and FCC 'Headwinds'
AT&T's purchase of EchoStar's 3.45 GHz and 600 MHz spectrum licenses won't reduce wireless competition, but instead it will make the two wireless providers "stronger and better able to compete in an increasingly competitive wireless marketplace," they told the FCC in a public interest statement posted Thursday (docket 25-303). The companies said the deal gives spectrum-constrained AT&T the spectrum it needs and takes care of the "overwhelming headwinds" that EchoStar faced at the FCC in trying to become a facilities-based nationwide carrier. AT&T and EchoStar announced the $23 billion spectrum deal in August (see 2508260005).
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A public interest statement was filed last month in EchoStar's separate $17 billion spectrum transaction with SpaceX (see 2509260056).
Data usage on AT&T's wireless network is likely to increase more than 80% over the next five years, driven by applications ranging from driverless cars to AI, according to the public interest statement. AT&T and EchoStar said congestion in AT&T's low-band spectrum will only get worse with the adoption of 5G-capable devices and the 6G transition. The 600 MHz portion of the deal will give AT&T a nationwide footprint averaging about 20 MHz of 600 MHz spectrum, which it will use to supplement its 5G deployment, helping clear up some congestion, they said.
In addition, the companies said the EchoStar spectrum "is AT&T’s only viable near-term option" for a sizable amount of spectrum that complements its existing holdings. Meanwhile, AT&T has a big incentive to deploy the EchoStar spectrum quickly, as it would help AT&T compete with other wireless carriers "by immediately and materially increasing the performance of its network," they said.
The 3.45 GHz spectrum would be deployed "almost immediately," according to the public interest statement. The 600 MHz spectrum would be put to use "on an aggressive schedule" to help improve in-building service quality. The companies said the 600 MHz spectrum would also give AT&T "adequate low-band spectrum for an 'anchor band' to allow AT&T to deploy 6G when it arrives."
Pointing to concerns that the FCC raised about whether EchoStar was meeting its terrestrial wireless buildout milestones (see 2505120074), EchoStar and AT&T said a hybrid mobile network operator (MNO) model, which EchoStar would shift to after its AT&T and SpaceX transactions, "will dramatically improve the economics" of its mobile wireless business.
AT&T will charge EchoStar a lower per-gigabyte rate for radio access network use "than EchoStar pays today when using its own, AT&T’s, or T-Mobile’s RAN." The deal also would increase the locations where EchoStar can directly interconnect to AT&T, they added. With EchoStar providing its customers with more reliable service at a lower cost but still using its own core network to craft new products and services, its hybrid MNO model will "put pressure on all wireless providers to up their game, thereby benefiting consumers generally."