EchoStar Agrees to Drop Suit over AWS-3 Auction
The company would still be on the hook for a shortfall payment if the auction fetches less than $2.9 billion.
WASHINGTON, May 29, 2026 – EchoStar and the Federal Communications Commission have reached a new agreement on the company’s potential liability ahead of an upcoming spectrum auction.
In terms of the amount potentially owed by EchoStar, it’s effectively the same as the existing arrangement. The parties said in the Thursday settlement they were looking “to avoid disputes over debts and any litigation and resolve the administrative claims” around the auction.
The agency’s re-auction of AWS-3 licenses returned by EchoStar subsidiary Dish is set to begin June 23. If those licenses fetch less than the $3.4 billion originally paid for them, EchoStar would be on the hook for the difference.
Dish has already paid about $500 million toward that shortfall payment. Under the terms of the new agreement, EchoStar would still owe a maximum of about $2.9 billion if the auction brought in $0. If the winning bids exceed that $2.9 billion amount, EchoStar won’t owe anything, but the FCC will retain the previous $500 million payment.
EchoStar agreed under the deal to drop its lawsuit against the FCC over the auction. The company had sued the agency over its rules for the auction, citing fears that stricter policies on small business participation would depress bids and cause the company to owe a shortfall payment.
Dish returned the licenses in the first place because the FCC found two of its own subsidiaries improperly received small business bidding credits Dish wouldn’t have been eligible for. Rather than pay full price, the company handed back the licenses and made the $500 million payment.
Both parties agreed not to bring any more legal or administrative claims against each other related to the auction, aside from the FCC’s normal enforcement powers if EchoStar violates a rule.
If EchoStar goes bankrupt, it agreed it would still be liable to pay the FCC anything it ends up owing after the auction.
Analysts at New Street Research think the auction will likely clear $3.4 billion. Blair Levin, New Street’s policy advisor, wrote in a May 18 investor note that the big three mobile carriers should all be interested in the licenses since they each have deployed airwaves in the band.
“The network grid of all three operators is optimized for AWS-3 spectrum, and it will remain a critical element of carrier networks,” he wrote.
He noted Dish had beat out a carrier’s bid for most of the licenses it handed back, and wrote it was unlikely Dish had artificially inflated auction prices with its bids.
The most valuable of the licenses cover Boston, New York, and Chicago. The re-auction was authorized by Congress in 2024 — before the FCC’s general spectrum auction authority was restored — to pay for the FCC’s Rip and Replace program.
The program reimburses smaller carriers to replace Chinese gear in their networks, and was facing a $3 billion shortfall that the FCC has already borrowed cash to shore up. Auction proceeds will be used to pay back the Treasury.
