FILE PHOTO: A satellite model is placed on EchoStar Satellite Services logo in this picture illustration taken April 4, 2022. REUTERS/Dado Ruvic/Illustration/File photo

By David Shepardson

WASHINGTON (Reuters) - The U.S. Federal Communications Commission will terminate its investigation into EchoStar's 5G buildout obligations in the country, according to a letter from the agency's chair.

The expected move follows EchoStar's $17 billion deal to sell wireless spectrum to billionaire Elon Musk's SpaceX and two weeks after it announced a $23 billion spectrum sale to AT&T.

FCC Chair Brendan Carr wrote in a letter to EchoStar Chair Charles Ergen on Monday that he had asked the agency staff to close the investigation and conclude that EchoStar has satisfied its buildout obligations.

Carr told reporters Tuesday the deal could be a "potential game changer for the American consumer."

He said it promises to free up new spectrum and bring new sources of competition to the wireless market, noting EchoStar's Boost Mobile brand has lost 2 million consumers in recent years.

Carr said he did not think Boost was putting much competitive pressure on the wireless market.

"I think that status quo wasn't working," Carr said. "We have a chance now to do something different... I think you can make a case that this is much more competitive."

Carr told EchoStar in May that the FCC was investigating the company's compliance obligations to provide 5G service in the United States, questioning EchoStar's buildout extension and mobile-satellite service.

Carr said he also directed the staff to confirm EchoStar's exclusive rights to a key spectrum block for ground and satellite use.

EchoStar, co-founded by telecommunications entrepreneur Ergen, faced the probe over slow deployment of 5G services.

SpaceX had also asked the FCC to review EchoStar's spectrum holdings, saying the telecommunications company might be "warehousing" valuable spectrum, which is not used to provide services.

The transactions with AT&T and SpaceX are still subject to FCC approval.

In June, President Donald Trump prodded EchoStar, parent of Dish TV, and Carr to reach a deal over the fate of the company's wireless spectrum licenses.

U.S. satellite TV provider DirecTV terminated its agreement to acquire EchoStar's satellite television business last year, which includes rival Dish TV, over a failed debt-exchange offer.

(Reporting by Jaspreet Singh in Bengaluru; Editing Franklin Paul and Lisa Shumaker)