American Tower has filed to sue EchoStar's Dish Wireless unit for trying to get out of its long-term contract.

The disagreement stems from EchoStar's planned $40 billion spectrum sales to AT&T and SpaceX.

Because of this planned sale, Dish, which has a long-term contract to use American Tower's infrastructure for the Boost Mobile service, said it's no longer obligated to pay these terms to American Tower.

The two companies signed a multi-year strategic colocation agreement (SCA) back in 2021, which American Tower claims "remains in full force and effect."

Dish sent letters to American Tower, stating that it was no longer obligated to lease space on the cell towers because Dish’s parent, EchoStar Corp., had been forced to sell valuable wireless spectrum, according to a lawsuit filed in federal court in Denver last week, as reported by Bloomberg.

EchoStar said it had been under significant pressure from the Federal Communications Commission (FCC) to sell the spectrum.

In late August, AT&T announced it would pay $23 billion to EchoStar to acquire approximately 30 MHz of nationwide 3.45 GHz mid-band spectrum and approximately 20 MHz of nationwide 600 MHz low-band spectrum for approximately $23bn in an all-cash transaction.

Around a fortnight later, Elon Musk's SpaceX struck a $17 billion deal to snap up EchoStar's AWS-4 (Advanced Wireless Spectrum) and H-block spectrum licenses.

American Tower: Not our problem that you sold your spectrum

However, Dish's argument that the spectrum sales impacted its contractual obligations with American Tower has not gone down well with the latter.

In response, American Tower rejected Dish's notice, claiming that it was a "voluntary" decision to sell certain licenses "for a substantial profit."

During American Tower's earnings call this week, CEO Steven Vondran stated that Dish accounts for four percent of the company's property revenue in the US and Canada. Bloomberg estimates that, based on the $5.25bn the towerco made in 2024, Dish paid more than $200 million for the use of American Towers’ cell equipment last year.

“Dish is simply seeking to use the cover of the transactions and its supposed reduced need for tower space as a basis to escape its clear and undisputed contractual obligations to American Towers,” the complaint alleges.

LightReading separately reports that the two companies sent further letters to one another, with American Tower pushing to open up talks to reach a "commercial resolution."

In the end, an agreement couldn't be reached, leading American Tower to sue Dish Wireless in the US District Court for the District of Colorado last week (October 20).

Vondran noted in this week's earnings call that he "expects them [EchoStar] to pay."

In response, EchoStar has hit back at the lawsuit, stating that it will argue its case.

"The allegations in American Tower’s complaint are at odds with reality. EchoStar strongly disagrees with American Tower's position and will vigorously defend this case," said an EchoStar spokesperson in a statement to DCD.