EchoStar rises as FCC approves $40 billion wireless spectrum sale to SpaceX and AT&T

EchoStar is up more than 7% in premarket trading Wednesday after the FCC said on Tuesday that it had approved the telecommunications company’s roughly $40 billion spectrum sale to SpaceX and AT&T, saying the two deals would “accelerate Internet speeds, strengthen competition, and bolster rural service.”

According to the FCC’s two separate orders, AT&T is buying about 50 megahertz of EchoStar’s nationwide spectrum for roughly $23 billion to expand its 5G network, while SpaceX is buying about 65 megahertz of EchoStar’s spectrum for around $17 billion to support Starlink’s next-generation direct-to-device service.

The approval caps a yearlong FCC review of EchoStar’s wireless spectrum licenses, which drew intervention from President Trump, who encouraged the company and FCC Chair Brendan Carr to reach an “amicable resolution.”

Still, the approval comes with a major condition: the FCC requires EchoStar to set up a $2.4 billion escrow account to cover potential obligations tied to disputes over work under its spectrum licenses — a requirement EchoStar called “unprecedented,” adding that it’s “evaluating next steps.”