EchoStar (NASDAQ: SATS) subsidiary, DISH Wireless, is forcing some of its contractors to make modifications to a number of existing DISH 5G cell site installations at Crown Castle (NYSE: CCI) towers at the contractors’ expense. Contractors are crying foul, saying that: the work on these sites was completed by 2022 and is beyond the one-year warranty period; their work was approved and accepted by both DISH and Crown under the Deployment Services Agreement and Statement of Work; and they were paid for work accordingly.
In April, DISH successfully defended itself from a Crown Castle lawsuit where Crown said DISH was not paying for extra space when the doors were opened on the base station equipment cabinet mounted on the 5’ X 7’ ground platform. DISH successfully argued that the door swing space was part of the installation, met the electrical code and did not encroach on other tenant ground space at the site. DISH and Crown have a Master Lease Agreement for DISH to mount its 5G cell site equipment on up to 20,000 Crown sites. To date, we estimate that DISH has deployed cell sites on nearly 3,400 Crown towers.
The jury ruled against Crown Castle because it said the company did not substantiate its claim. Colorado state judge Sarah B. Wallace upheld the verdict writing, “Thus, consistent with the jury verdict and the evidence presented at trial, the court finds the parties intended DISH to be able to use space beyond its exclusive 5′ x 7′ lease area for its door swings without triggering additional rent under the [master lease agreement] so long as the door swings are reasonably placed on the 5′ x 7′ space.”
The current situation is different. Now DISH is demanding that contractors who worked on these sites go back and relocate the power protection cabinet (PPC) that houses critical electrical components (surge protectors, circuit breakers) and the telco cabinet that terminates the fiber backhaul cable. Both of these compact cabinets are mounted above the platform on an H-frame but extend beyond the perimeter boundary by several inches. (see photo)
DISH is telling contractors that a claim of up to $5,000 per site has been made against it for each site that it says was not installed in accordance with the DSA and SOW. Furthermore, DISH says the claim is accruing at $200 per month until the change is made. DISH is withholding the money from accounts payable owed to the contractors.
In some cases, where contractors installed many sites for DISH, that cost amounts to hundreds of thousands of dollars, jeopardizing those contractors’ futures. If they refuse to do the work, DISH is still withholding the funds and, worst case, banning them from any further work in that market.
According to some contractors, DISH initially asked vendors to be good partners and fix the sites for free. However, the contractors did not agree to fix sites without being compensated. DISH then informed contractors that they still would be charged $5,000 for each site and that amount would be deducted from billings for current work, even if they fix the sites for free.
DISH has not responded to Inside Towers’ requests for comment by press time.
By John Celentano, Inside Towers Business Editor
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