EchoStar, FCC in Talks to Resolve AWS-3 Auction Lawsuit

WASHINGTON, Oct. 24, 2025 – EchoStar and the Federal Communications Commission are trying to reach an out-of-court settlement over a spectrum auction dispute that the communications company worries could prove costly.

EchoStar had sued the agency over its rules for reauctioning spectrum licenses in the AWS-3 band, licenses that Dish, now owned by EchoStar, had previously returned after the FCC found the company improperly obtained them in 2014. 

If the auction fetches less than the licenses’ original price, about $3.3 billion, then EchoStar is on the hook for any shortfall. That’s something EchoStar said it fears happening as a result of the updated rules.

But the two sides are evidently working out some kind of agreement.

“The parties are currently in active negotiations to resolve this dispute,” EchoStar and the FCC said in a joint Oct. 15 filing. “Those negotiations could obviate the need for litigation.”

During the rulemaking process, EchoStar had repeatedly asked the agency to either stick with its 2014 rules or relieve the company of any liability for shortfall payments.

EchoStar said in its lawsuit the updated rules, more restrictive in handing out bidding credits for smaller companies, might drive participation down and cause the proceeds to be low enough that the company would have to make a huge shortfall payment. The agency said when it adopted the new rules that it would have been irresponsible not to update them after a decade, and it was simply trying to prevent larger companies from gaming the designated entity system.

After the original AWS-3 auction, the FCC found two smaller winning bidders – so-called designated entities that received a discount because of their size – were financially too close to EchoStar. The company handed them back rather than pay the full price.

After agreeing on two major spectrum sales worth a total of $40 billion, analysts expect EchoStar to sell all of its spectrum, including the AWS-3 licenses it still has. The company in total spent more than $13 billion at the auction.

Verizon has reportedly expressed interest in scooping those up. The companies were reportedly nearing a deal last month, but haven’t publicly announced one. In Securities and Exchange Commission filings, EchoStar had valued its remaining AWS-3 licenses at about $9.8 billion.

EchoStar declined to comment on the nature of the negotiations with the FCC. The agency did not immediately respond to a request for comment.

The parties asked judges to put the lawsuit on hold while they negotiated, which the court agreed to do the same day.

The FCC had its auction authority reinstated in July, but the AWS-3 re-auction was authorized as a one-off late last year. It’s a means of raising cash to pay for the agency’s Rip and Replace program, which reimburses smaller providers for swapping blacklisted Chinese gear out of their networks. The program was facing a $3 billion shortfall before Congress allowed the FCC to borrow the necessary cash and pay the Treasury back with auction proceeds.

By law the auction has to start by June 23, 2026, although it could come sooner.