Crown Castle Axes Dish Contracts, While Fujitsu Joins Calls for Spectrum Deal Conditions
Crown Castle said Monday that it had terminated its wireless infrastructure agreement with Dish after the latter company defaulted on payment obligations. Meanwhile, Fujitsu has joined the ranks of companies and groups urging the FCC not to approve transfers of EchoStar spectrum licenses until Dish's parent company makes good on contracts tied to its now-abandoned terrestrial wireless network buildout. MoffettNathanson told investors Tuesday that there's "a decent chance" the FCC could step in and try to force EchoStar to make good on its contracts with the tower companies.
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Crown Castle said the termination of the agreement was to protect its shareholders and try to recover more than $3.5 billion in remaining payments. Dish "is refusing to pay the American workers and businesses it used to build its network and meet the minimum FCC coverage requirements necessary to retain its spectrum licenses -- an American public resource. Now those same spectrum licenses are being sold for more than $40 billion."
While Crown Castle said it backs AT&T and SpaceX buying spectrum assets from EchoStar, "we will do everything we can to enforce our rights under our agreement with DISH and keep DISH to its word."
Fujitsu's subsidiary 1Finity Americas said in an FCC filing posted Tuesday (docket 25-303) that it committed "substantial capital and resources" over the past five years to Dish's 5G deployment. It said Dish communications indicate that the company "may seek to shirk its obligations" to 1Finity, using the EchoStar spectrum license sales to SpaceX and AT&T as its excuse. But the 1Finity/Dish master purchase agreement requires Dish to either fulfill its remaining purchase commitment of tens of thousands of radio units or assign the purchase agreement to the spectrum purchaser or another affiliate, 1Finity argued. It urged "a narrowly tailored, transaction-specific condition to address this circumstance" in the form of Dish assigning its master purchase agreement obligations to AT&T or making 1Finity whole if it fails to perform under the agreement.
Crown Castle and America Tower have sued Dish Wireless because it tried to get out of wireless tower lease contracts with the two companies after it ended its terrestrial wireless network operator plans. Wireless infrastructure interests have urged the FCC not to approve the license transfers to SpaceX until Dish commits to fulfilling contracts related to its wireless buildout (see 2512160006). American Tower and EchoStar didn't comment Tuesday.
MoffettNathanson wrote investors Tuesday that while the tower operators likely have the law and contracts on their side, past comments by EchoStar Chairman Charlie Ergen were clear that "he has no intention of paying these contracts in full, or anything close to it." The parties may end up settling, but EchoStar "seems to have the upper hand," with the tower companies getting paid in full only if the FCC steps in. FCC Chairman Brendan Carr has long supported wireless construction firms, MoffettNathanson added, so EchoStar's "bad faith actions ... toward a favored group could end up backfiring."