SATS, The DOJ, and Further Policy Considerations

What’s New:  The deal between SATS and T has raised numerous policy related questions.  In this note, we expand our policy analysis to address the questions we have most often received this week and clear up some misconceptions we have noticed about how policy process will proceed from here on out.

Background.  We think everyone reading this will be familiar with the basic structure of the SATS/T deal announced earlier this week.  New Street has already addressed the financial and policy issues in a series of notes, including:

In this note we address other policy questions we did not address in our first response to the deal but that have come up repeatedly in our conversations with investors.

Analysis.  In terms of the upcoming policy process, we think the key points for investors to keep in mind are the following.

The deal likely is subject to approval by the DOJ Antitrust Division and the District Court Judge who approved the consent decree, and they are likely to approve the transaction.

In addition to having to approve the transaction under the consent decree, the DOJ Antitrust Division could assert jurisdiction over the transaction and evaluate whether it would result in a restraint on trade and have an anti-competitive impact.

We think the more likely path is for the DOJ to limit its role to advising the FCC.

One question that will arise in the proceeding, but we doubt will result in new rules, is whether there should be rules with minimum standards for MVNOs.

The transaction will cause there to be a renewed policy debate about the nature of competition in the communications marketplace, but it is unlikely to drive policy changes material to investors.

The SATS sale takes pressure off the FCC in terms of both the timing and the spectrum footprint of the auction for the Upper C.

The SATS spectrum sale increases the odds that cable will be able to continue to rely on the current CBRS band allocation.

The sale of the 600 MHz reduces the odds of a successful second broadcast incentive auction.

The SATS spectrum sale also takes pressure off NTIA in terms of the spectrum strategy it is currently working on.

While there is a high level of uncertainty about them, the current proceedings involving SATS spectrum are more likely to be resolved through transactions than FCC action.

It will be difficult for Carr to take actions that keep a cloud over SATS ability to sell the spectrum.

Carr could take actions that impose a financial penalty on SATS but that may not work and could backfire.

[1] For example, the statement noted “It is of concern to the United States that continued spectrum aggregation by the Big 3 threatens to impede the path for a fourth national player …Where future spectrum consolidation transactions threaten this path, the Antitrust Division stands ready to investigate and, if warranted by the facts and evidence, use its enforcement power to protect competition and American consumers.”

[2] As we noted then, If Cable or some other entity (such as one of the Big Tech players) wanted to buy SATS’ assets, the apparent desire of the DOJ to prevent the Big Three from buying the assets could enable Cable or another buyer to obtain the assets at a lower sales price.  But we don’t think Cable is interested and a Big Tech buyer brings with it other antitrust concerns.  Thus, in light of Ergen deciding he must sell, we think the DOJ will have no choice but to accept that the only bidders will be the Big Three.

[3] We should also note that in that statement, the DOJ gave itself wiggle room, writing that “readers should not draw overly broad conclusions regarding how the Department is likely in the future to analyze other collaborations or activities, or transactions involving particular firms. Enforcement decisions are made on a case-by-case basis, and the analysis and conclusions discussed in this statement do not bind the Department in any future enforcement actions.”  As with all such boiler plate language, we understand why government bureaucrats write such statements but accept that it is our job to figure out in a precise way what matters and what does not.  And in this case, we think the DOJ can figure out a way to rationalize why it will approve the deal, despite the spectrum aggregation concerns.

[4] We know we are supposed to refer to it as the one big, beautiful bill but in light of President Trump shifting his view on the name, we will refer to it as the budget reconciliation bill until the President issues an Executive Order requiring everyone to call it whatever he decides.

[5] The announcement refers to the one big, beautiful bill. But we assume we will not be the only one to write that name out of history when the order comes.

[6] For example, In April 2025, the Fifth U.S. Circuit Court of Appeals vacated a $57 million fine imposed by the FCC on AT&T, ruling that the agency’s internal enforcement process violated the Seventh Amendment, as AT&T was denied its right to a jury trial. The court relied on the Supreme Court’s earlier decision in SEC v. Jarkesy(2023), which similarly limited agencies’ ability to impose fines without judicial oversight.