EchoStar Corporation is reportedly preparing for a potential Chapter 11 bankruptcy filing as it seeks to safeguard its wireless spectrum licences amid increased regulatory scrutiny from the Federal Communications Commission (FCC), according to sources cited by The Wall Street Journal.
The telecommunications services provider has not issued an official response regarding the report.
In May, the FCC informed EchoStar that it was reviewing the company’s adherence to federal obligations, particularly those related to the provision of 5G services within the United States. The investigation includes an assessment of EchoStar’s request for an extension to its network buildout deadlines and its mobile-satellite service operations.
EchoStar disclosed in a recent regulatory filing that the FCC’s actions have significantly restricted its capacity to make key strategic decisions, particularly those involving investment in and the future direction of its Boost Mobile business.
The company has also acknowledged missing approximately USD 500 million in interest payments, attributing the lapse to the ongoing uncertainty stemming from the FCC’s investigation.
Further compounding its financial and operational challenges, EchoStar suffered a setback last year when U.S. satellite television provider DirecTV terminated an agreement to acquire EchoStar’s satellite TV business, which includes rival provider Dish TV. The deal fell through following a failed debt-exchange proposal.
-Reuters
