FCC Clears SpaceX to Use EchoStar Spectrum, But There Is a $2.4B Problem

May 12, 2026

SpaceX just cleared a key regulatory hurdle to upgrade Starlink Mobile using EchoStar’s spectrum. The only problem? The deal comes with a condition that has already sparked pushback from EchoStar.

On Tuesday, the Federal Communications Commission approved SpaceX to use 65MHz of radio spectrum to unleash faster Starlink Mobile speeds, and cleared EchoStar’s 50MHz spectrum sale to AT&T, moves that FCC Chair Brendan Carr called “big wins for consumers.”

“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,” Carr said.

EchoStar sold the spectrum to SpaceX and AT&T for $43 billion in cash and stock. But surprisingly, EchoStar is pushing back on one condition. The FCC is requiring the company to establish an “escrow account of $2.4 billion” to pay contractual obligations to third-party companies, such as tower owners and fiber providers, after it abandoned its bid to become a major cellular provider through Boost Mobile.

An EchoStar spokesperson told PCMag: “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. However, these approvals come with an unprecedented involuntary escrow condition. We are analyzing this requirement and evaluating next steps.”

Some companies are demanding that EchoStar pay them for past contracts, such as leasing tower space and installing new radios on towers. The company was previously focused on turning Boost Mobile into the fourth major wireless carrier in the US. Last year, however, EchoStar abandoned those ambitions after reaching a spectrum deal with AT&T to turn Boost Mobile into a “hybrid” mobile network operator instead.

EchoStar told the FCC that it “reached settlements with hundreds of vendors and made hundreds of millions of dollars of payments.” However, the Wireless Infrastructure Association alleges that EchoStar has been trying “to avoid billions of dollars in obligations while enriching itself” at the expense of the tower and fiber backhaul companies it owes money to.

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In recent weeks, the Wireless Infrastructure Association has been calling on the FCC to require an escrow fund, after estimating that EchoStar could owe between $7 billion and $10 billion from the contract defaults. But on Friday, EchoStar warned the FCC that “If an escrow condition is involuntarily imposed, it would directly jeopardize the transactions” with SpaceX and AT&T.

It looks like the FCC is trying to reach a middle ground, and perhaps betting that EchoStar won’t cancel $43 billion in deals. In the order, the commission added: “We find that such a condition is necessary to conclude that the proposed transaction serves the public interest.”

SpaceX and EchoStar anticipate closing the spectrum sale by Nov. 30, 2027.