One of the blockbuster financial deals of the year is a $42 billion dollar sale of valuable spectrum from EchoStar to AT&T and SpaceX.

Nearly everyone benefits from this sale: EchoStar shareholders get a fair price for selling the asset. AT&T and SpaceX will upgrade American broadband. And American consumers will get more reliable and expanded broadband services to meet skyrocketing demand.

Great. But there’s a snag and the FCC or the courts need to intervene.

Dish Network (now owned by EchoStar) acquired spectrum during a previous auction, but due to its own managerial incompetence, Dish failed to meet the FCC’s build-out requirements even though it had signed contracts with cell tower companies to construct the Boost Mobile network.

So now EchoStar wants to pocket up to $40 billion by selling their spectrum and stiffing their cell tower contractors – who already started construction of the 5G network – out of as much as $7 billion owed. They want to escape paying these bills by placing the losses on the books of a discarded shell company.

The big winner in this scam will be billionaire Charlie Ergen who co-founded Dish.  It’s an affront to the rule of law. Creditors should ALWAYS be first in line to get paid before investors.

A study by the Brattle Group found that tower operators would have to increase their rents on other networks like AT&T, T-Mobile, and Verizon by 6% to 11% to make up for these losses, and those costs get passed on to all of us with cell phones.

The FCC (or the courts) should end this scam by requiring EchoStar place enough of the proceeds of the spectrum sale in escrow to cover any valid vendor claims.