Elon Musk’s SpaceX is the latest customer to purchase spectrum from EchoStar as that company continues to restructure. The firms have reached a definitive agreement for SpaceX to acquire $17 billion worth of AWS-4 and H-block spectrum, designated for mobile and satellite communications. SpaceX will also fund approximately $2 billion of cash interest payments payable on EchoStar debt through November of 2027. In addition, EchoStar is entering into a long-term commercial agreement that will allow it to access SpaceX’s next-generation Starlink Direct to Cell service for EchoStar’s Boost Mobile subscribers.

EchoStar operates Boost as a hybrid mobile network operator (MNO) using its own cloud-native 5G core while leveraging partner networks like AT&T for radio access network (RAN) connectivity.

Bloomberg says the deal allows Charlie Ergen’s “beleaguered telecommunications company to resolve an overhanging regulatory probe and pay down debt.”

The $17 billion will be funded by up to $8.5 billion in cash and up to $8.5 billion in SpaceX stock valued as of the entry into the definitive agreement, or $212 per share for SpaceX Class A Common Stock.

“The AWS-4 sale transfers another crown jewel of EchoStar’s spectrum portfolio, effectively ending hopes that it would become a fourth major wireless carrier as stipulated by regulators as part of the approval of the T-Mobile and Sprint merger,” writes Bloomberg, noting the SpaceX deal comes less than two weeks since it concluded a $23 billion spectrum sale of 3.45 GHz and 600 MHz spectrum licenses to AT&T.

The SpaceX sale consists of spectrum in the 1.9 GHz to lower 2 GHz bands.

Ars Technica identifies SpaceX as having initiated EchoStar’s regulatory problems, reporting that “after SpaceX alleged that EchoStar subsidiary Dish Network ‘barely uses’ its spectrum and urged the FCC to make the spectrum available to other carriers, FCC Chairman Brendan Carr announced an investigation into EchoStar and threatened to revoke its spectrum licenses.”

In EchoStar’s announcement, SpaceX President & COO Gwynne Shotwell said that while the first-generation Starlink satellites with Direct to Cell capabilities connected who were “off the grid” and during natural disasters, the company now plans in phase two to leverage its new “exclusive spectrum” to develop “Starlink Direct to Cell satellites, which will have a step change in performance and enable us to enhance coverage for customers wherever they are in the world.”

Because EchoStar is transferring its FCC licenses to SpaceX along with the spectrum, the deal effectively allows Starlink to enter the consumer mobile market, assuming it can demonstrate compliance with the FCC license terms. Starlink uses a satellite-based approach to mobile communications that some speculate will  eliminate “dead zones” around the world.