EchoStar/Dish 's failure to pay cell tower rent could leave you paying more for cell service
U.S. consumers might pay more for monthly wireless service because Dish is not paying its long term long-term master lease agreements.
Failure of Dish to pay tower rent could force you to pay more for servce. | Image by Dish Network
Late in 2024 and throughout 2025, Dish stopped construction on new cell sites. This was done to help Dish and its parent company EchoStar conserve cash, but it left many towers half-finished. For example, on some towers, Dish was able to install mounting brackets, and the huge 5G antennas. However, Dish did not connect them to backhaul power or fiber. This left tower companies like American Tower and Crown Castle with a financial problem.
Dish is not paying rent on some of the cell towers it signed a long-term lease on
While some of the space on these towers is being used by Dish, the latter is not paying rent on the towers covered under long-teNm master lease agreements. Nor has it completed the technical build out required to make the site functional. The Brattle Group has completed a study that shows the battle between Dish and the tower vendors will have a $9 billion impact. The vendors want the FCC to force Dish parent EchoStar to create an escrow account tied to the latter's spectrum sales. This would be done to make sure that the tower companies get paid.
The problem here is that if Dish continues not to pay the infrastructure vendors, rents for these towers could rise 5.7%–10.7%. This could force carriers and ultimately consumers to pay more for wireless service. Brattle's study was paid for by the Wireless Infrastructure Association (WIA). Both figure that the tower companies are owed $7 billion to $10 billion for the services they provided to EchoStar.
"While this is an issue of unjust enrichment that directly harms individual companies, the bigger issue is the harm done to the entire wireless infrastructure ecosystem, a system that thrives on the predictability of stable, long-term contracts. The result of what Dish is doing here is to harm that ecosystem."
WIA President and CEO Patrick Halley
FCC needs to approve EchoStar's spectrum sales
The FCC still needs to approve EchoStar's spectrum sales. Between August and September last year, EchoStar sold spectrum valued at $40 billion. AT&T paid it $23 billion for 3.45 GHz mid-band & 600 MHz low-band airwaves. SpaceX paid it $17 billion for AWS-4 & H-block spectrum. As those deals were being worked on, EchoStar declared force majeure on its long term leases. This is an "act of God" that prevents a company from fulfilling its side of a contract.
Photo of a man working on a cell tower. | Image by Midjourney for Fierce Wireless
In this case, EchoStar said that the FCC's investigation into its spectrum holdings and the dismantling of its standalone 5G network allowed it to call force majeure on its long term contracts. This is a highly disputed and complex matter. The WIA says that the FCC should hold off on approving EchoStar's spectrum sales unless the company is forced to set up an escrow that will set aside enough money for the company to meet its obligations with the tower companies. The escrows would be funded by the spectrum sales.
"There has to be a guarantee that EchoStar will actually set aside funds to pay the obligations that it ultimately owes. That’s what this is about. It’s not a force majeure. That’s a bogus legal argument. It’s not a force majeure. Period.
"We’d like to make sure that Dish is not able to use the FCC spectrum assignment process to enrich itself while leaving the entire industry that built its network holding the bag.
"We’d like to make sure that Dish is not able to use the FCC spectrum assignment process to enrich itself while leaving the entire industry that built its network holding the bag.
-WIA President and CEO Patrick Halley
Publicly traded tower companies like American Tower, Crown Castle and SBA Communications have sued Dish over the default. Crown Castle put a $3.5 billion amount on how much it is owed by Dish. Considering that FCC Chairman Brendan Carr had previously gone after EchoStar, we could see the escrow option put into place, which would help guarantee that the tower companies don't get shafted.
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