Former FCC Commissioner Nathan Simington has criticized agency Chairman Brendan Carr for his handling of EchoStar (NASDAQ: SATS). The Commission opened three proceedings on EchoStar in May, Inside Towers reported: one on 5G buildout compliance and another on the use of EchoStar’s 2 GHz spectrum licenses. The FCC opened an additional proceeding into sharing 2 GHz between EchoStar’s terrestrial uses and satellite services.
EchoStar told the agency the proceedings have basically frozen its ability to operate its business, Inside Towers reported. Simington warns in an Op Ed for RealClear Policy the cumulative effect of the proceedings has the potential to be seriously market-disruptive, and impair American national security.
Among the major national carriers, EchoStar is a technological leader in areas most relevant to competition with China and to national priorities in trade and advanced manufacturing, according to the former commissioner. “That makes it a national strategic asset. As a true fourth national network, it protects consumer choice and lower consumer prices,” writes Simington in the Op Ed for RealClear Policy.
He says the FCC “threatens such severe sanctions that they put EchoStar’s financial viability in question and threaten to kill the company. This places every holder of a spectrum license in a riskier position and will raise consumer prices by forcing every licensee, not just EchoStar, to charge higher risk premiums.”
Simington explains the proceedings “have the cumulative effect of threatening EchoStar with numerous spectrum license revocations, which has severely affected EchoStar’s ability to raise capital,” he writes.
Every holder of a spectrum license is taking note, Simington says. “Threatening license revocations is the ultimate sanction because without licenses, you don’t have a wireless business.” He calls this type of sanction “rare” in the cell phone business, noting the last time it happened was when NextWave lost licenses for non-payment after its 1998 bankruptcy, and the Supreme Court overturned those revocations in 2003.
EchoStar committed to build its network as part of the U.S. government’s commitment to four national networks when T-Mobile acquired Sprint in 2020. EchoStar told the FCC it’s meeting those commitments.
But the concerns with these threats go farther, he believes. “For years, we’ve heard that China is beating us in 5G,” Simington explains. “For consumers, 5G was supposed to deliver fast streaming and new applications. But the more interesting part of 5G was its applications to manufacturing, logistics, and public safety—all areas where China is realizing far greater gains than we are.”
He notes that China has about 16,000 “5G private networks” while America has less than 400. “China has about 77% of its population on ‘5G Stand-Alone,’ versus only about 37% in the USA—meaning that Chinese cell phone networks are more capable than ours of supporting advanced security and performance features for public safety,” writes the former Commissioner. He believes American 5G technology needs more radios, more advanced network cores, and more capital to keep pace with China.
EchoStar has built the only American OpenRAN network, according to Simington. It excludes Chinese suppliers accused of threatening national security, he writes. “One of the most innovative companies in American telecommunications is at risk of suffering an unprecedented and unpredictable punishment. We’re all going to pay a price for it as the effects ramify through the markets, and it’s going to hurt our international competitiveness,” Simington concludes. “The FCC should reverse course. If not, China won’t have to beat us—we’ll have beaten ourselves.”
By Leslie Stimson, Inside Towers Washington Bureau Chief
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