FCC Clears SpaceX’s Purchase of EchoStar Spectrum for Starlink, Orders $2.4 Billion Escrow

The Federal Communications Commission on Tuesday approved SpaceX’s purchase of key EchoStar spectrum licenses for Starlink’s U.S. direct-to-device service, but only after imposing a major condition: EchoStar must place $2.4 billion in escrow to cover qualifying outstanding claims tied to disputes over DISH and EchoStar’s troubled 5G network buildout.

The approval, issued May 12 by the FCC’s Space Bureau and Wireless Telecommunications Bureau, clears the transfer to SpaceX of about 65 megahertz of spectrum, including AWS-4, H-block and certain unpaired AWS-3 licenses, along with related authorizations. The airwaves are central to Starlink’s direct-to-device, or direct-to-cell, plans in the United States — a model in which satellites connect directly with ordinary mobile phones to expand coverage in dead zones and support emergency communications.

The escrow requirement is the heart of the FCC’s order. EchoStar is selling valuable spectrum assets, but regulators said $2.4 billion must be reserved while payment disputes from DISH and EchoStar’s terrestrial 5G buildout are sorted out. Those claims come from tower companies, contractors and infrastructure vendors that have said they were not paid.

EchoStar pushed back on the condition. “These approvals come with an unprecedented involuntary escrow condition. We are analyzing this requirement and evaluating next steps,” an EchoStar spokesperson said Tuesday.

The broader SpaceX transaction has been in motion since Sept. 8, 2025, when EchoStar said it had agreed to sell AWS-4 and H-block spectrum to SpaceX in a deal worth about $17 billion, structured as up to $8.5 billion in cash and up to $8.5 billion in SpaceX stock. Separate reporting later valued an additional AWS-3 sale to SpaceX at about $2.6 billion. At the time of the original announcement, SpaceX President and Chief Operating Officer Gwynne Shotwell said, “We’re so pleased to be doing this transaction with EchoStar as it will advance our mission to end mobile dead zones around the world.”

The FCC’s approval also reflects a broader policy push in favor of direct-to-device services and secondary-market spectrum deals. On April 23, the FCC’s Space Bureau said in a wider order that, “The Commission intends to support the renaissance in direct-to-device by fostering a predictable regulatory environment that protects investment-backed expectations and encourages secondary-market transactions.” Multiple reports said the approval gives SpaceX flexibility to use the spectrum in terrestrial, space-based and hybrid architectures, while also attaching general performance obligations meant to ensure the licenses are put to use.

At the same time, the agency has been scrutinizing EchoStar and DISH over both buildout obligations and unpaid bills. FCC Chairman Brendan Carr wrote to EchoStar in May 2025 directing staff to review the company’s compliance with buildout requirements. Crown Castle, a major tower company, said in a Jan. 12, 2026, release that DISH had defaulted and that it was seeking more than $3.5 billion. American Tower also filed a complaint in late 2025 over unpaid obligations.

The same FCC action also approved separate EchoStar spectrum transfers to AT&T. But the central message of Tuesday’s decision was that regulators are willing to let SpaceX move ahead with spectrum needed for Starlink’s U.S. direct-to-device service, while requiring a large pool of money to be set aside for unresolved claims linked to EchoStar and DISH’s 5G buildout.