Dish's Tower Company Lease Arguments Could be on Shaky Ground: Consultant
EchoStar faces litigation from two tower companies over lease agreements from the now-ended nationwide wireless network buildout by its Dish Wireless subsidiary, but few if any other tower company suits are likely, said Ken Schmidt, president of Steel in the Air cell tower lease consultancy. American Tower and Crown Castle represented the vast bulk of Dish's wireless network deployment, and have substantially more to lose than other tower companies, Schmidt added.
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Crown Castle's Dish suit, brought earlier this month in U.S. District Court for the District of Colorado, seeks a declaratory judgment that Dish isn't excused from its obligations under the parties' tower lease agreement. American Tower said much the same in its suit against Dish brought in October (see 2510280038).
Schmidt said that Crown Castle apparently structured the tower lease agreements without termination clauses, meaning Dish seemingly lacks a right to terminate. He said Dish got lower pricing than other wireless carriers for installing its network equipment on the tower companies' towers because Dish's equipment took up less space and put less demand on the towers. In exchange, the tower companies got long-term lease commitments, he said.
In its suit (docket 1:25-cv-03756), Crown Castle said Dish is claiming EchoStar's forthcoming sales of spectrum rights that were to be used to make Dish into a nationwide wireless carrier constitute a force majeure event -- an unforeseen happening that prevents a party from fulfilling its obligations. However, Crown Castle said, "there has been no unexpected or unforeseeable event" and EchoStar's planned spectrum sales are "the antithesis of force majeure."
Schmidt told us that Dish's force majeure argument seems unconvincing since the FCC never ordered EchoStar to sell the spectrum rights.
Crown Castle argues much the same. In its lawsuit, the tower company said the FCC's probe of EchoStar's supposed underutilization of its 2 GHz spectrum (see 2505130003) never saw the agency revoke or suspend any EchoStar licenses. Crown Castle said EchoStar had "an array of options to contest any potential action taken by the FCC," but that it opted into spectrum sale deals with AT&T and SpaceX." It said Dish's argument "that the FCC 'compelled' EchoStar to sell its spectrum -- is demonstrably untrue."
Dish didn't comment Wednesday.
Along with its lawsuit, Crown Castle filed letters (here and here) it received from Dish in September in which the company said discussions with the FCC "made clear that EchoStar’s utilization of its spectrum was unacceptable given the small number of Boost Mobile subscribers on its network. The FCC further made clear that EchoStar’s continued ownership of such spectrum licenses failed to best serve the public interest and that EchoStar needed to sell certain spectrum licenses or face a wide-ranging license revocation by the FCC. Either way, EchoStar said, that it would have had to abandon its longstanding business plan for Boost Mobile and that the FCC actions and spectrum sales thus constituted force majeure events.
Dish's response to the American Tower suit, also filed with the U.S. District Court in Colorado, is due Dec. 8.