EchoStar paid one outstanding bill but is holding up payment on another, continuing what has been an increasingly sordid financial juggling act for the diversified telecommunications provider.

EchoStar, in a Securities and Exchange Commission (SEC) filing late last week, said it would make outstanding interest payments on a handful of secured notes. Those payments were initially due in late May and early June, with the delayed payment coming within the “applicable 30-day grace periods” so as not to be considered a default on those payments, and with those delayed payments also including “interest on the defaulted interest.”

In the same filing, EchoStar also warned that it would not be making scheduled interest payments on another handful of secured notes with due dates of July 1. Those notes also carry a 30-day grace period, but EchoStar remained cryptic on its payment plans.

EchoStar license scrutiny

This payment poker is due to an ongoing battle between EchoStar and the Federal Communications Commission (FCC) over already granted deadline extensions for some of EchoStar’s wireless spectrum licenses. Specifically, over EchoStar’s 2 GHz licenses that have become a point of contention for satellite-to-device communications.

EchoStar’s Dish subsidiary initially acquired those spectrum licenses more than a decade ago from financially strapped would-be satellite communication provider TerreStar Networks and its acquisition of DBSD North America. Dish noted that it planned to use that roughly 40-megahertz of spectrum to power a satellite-to-device service.

However, spectrum licenses have FCC-mandated buildout requirements designed to ensure that a license owner is putting those licenses to work for the common good and not just sitting on those licenses to sell at a later date. EchoStar has received a handful of FCC extensions on some of its licenses as it has attempted to launch commercial services and has used some of its 2 GHz spectrum to support its terrestrial-based 5G network.

This notion came to a head earlier this year when the FCC’s Wireless Telecommunications Bureau (WTB) opened comments on EchoStar's spectrum license management. FCC Chairman Brendan Carr has openly questioned EchoStar’s management of those spectrum licenses.

In an SEC filing, EchoStar said the investigation harmed its ongoing deployment and "threatens its viability as a wireless provider as well as endangers the video and broadband satellite services upon which millions of consumers rely." The company used that argument to forgo $326 million in interest payments that were due in late May and early June.

EchoStar Chairman Charlie Ergen and Carr met earlier this month in an attempt to negotiate a solution, a plan that later received support from President Donald Trump, who EchoStar said in its latest filing, “encouraged the parties involved to reach an amicable resolution.”

That filing noted that while “no such resolution has been achieved, and it is possible that no such resolution will ultimately be achieved, … based on the current discussions, [EchoStar] should in good faith cure the non-payment defaults under the indentures by making the interest payments.”

“These actions will further extend the timeline for EchoStar to explore an acceptable resolution of the FCC’s stated concerns in a manner that minimizes disruption to the company’s businesses and lifts the regulatory uncertainty created by the inquiries,” EchoStar notes in the filing, which also ends with a more ominous, “all of the company’s strategic options remain under consideration as it continues to explore potential resolution pathways.”

EchoStar has been traversing a rocky financial path for years, but late last year appeared to have found more stable footing backed by a new financing plan that had it ditch $7 billion in debt to provide it with $5.5 billion in new financing.

EchoStar controls a number of entities, including cellular-based telecommunications provider Boost Mobile, satellite-based communications providers Hughes and HughesNet, satellite-TV provider Dish, and streaming-TV provider Sling. Boost Mobile is the only offering that has shown recent growth potential, though it remains a financial drag on EchoStar’s overall operations.

The operator did manage to add approximately 150,000 net connections during the latest quarter after years of losing customers, but those additions came at an incredible cost. That cost is tied to Boost Mobile attempting to commercially compete with established rivals like Verizon, AT&T, and T-Mobile US, not to mention the dozens of smaller, prepaid operator brands in the market.