$19.8 billion airwaves auction may mean better cell service

Sree Kotay at SXSW 2015

T-Mobile, Dish Network and Comcast were the leading winners in the incentive spectrum auction that generated $19.8 billion in gross bids for 70 MHz of licensed 600 MHz airwaves, FCC officials announced today.

The FCC said previous year that 62 bidders made upfront payments to take part, including AT&T Inc (T.N), Verizon Communications Inc (VZ.N), Dish Network Corp (DISH.O), T-Mobile US Inc (TMUS.O) - which is controlled by Deutsche Telekom (DTEGn.DE), Comcast Corp (CMCSA.O) and U.S. Cellular Corp (USM.N).

T-Mobile said it walked away with 31 MHz of spectrum - 45 percent of the total - that's spread across the United States and Puerto Rico, quadrupling its low-band holdings. T-Mobile boasted in a press release that it won 45 percent of the spectrum in the auction, amounting to "31MHz nationwide on average, quadrupling the Un-carrier's low-band holdings". To be precise, T-Mobile won 31MHz of spectrum, covering the entire USA and Puerto Rico.

The FCC disclosed the results of 600 MHz incentive auction, and perhaps the biggest surprised was the complete lack of participation by Verizon.

"With this purchase, T-Mobile now has significantly more low-band spectrum per customer than any other major provider and almost triple the low-band spectrum per customer than Verizon", T-Mobile said. There's continued speculation that if this arrangement doesn't work, Comcast could ultimately jump into the wireless business more fully - perhaps via the acquisition of a company like T-Mobile. T-Mo CTO Neville Ray has said that T-Mobile will begin deploying its new spectrum this year in both new and existing markets, but Ray didn't say which markets those will be.

Billionaire Charlie Ergen's Dish Network, which is already sitting on a vast trove of airwaves it hasn't yet put to use, bid the second most with $6.2 billion.

Overall, 175 broadcasters will receive a total of $10.05 billion from the auction, and their spectrum-relocation costs are slated to be covered by the auction proceeds, with the first stations scheduled to move on November 30, 2018. Broadcasters voluntarily participated to relinquish airwaves for mobile use in exchange for a portion of the winning bids.

"It is encouraging to see that competitive carriers and potential new entrants secured the majority of the spectrum auctioned".

Other notable telecommunication operators winning a significant number of licenses in the auction included AT&T, which picked up 23 licenses covering 18 PEAs for $910 million; and U.S. Cellular, which acquired 188 licenses covering 92 PEAs for $329 million. Stations that accepted $10.05 billion in payments can go off the air or move to other airwaves.

However, broader coverage will require lower spectrum bands. The impact this additional spectrum could have on the wireless industry, especially with the upcoming implementation of 5G wireless technologies, is immeasurable.

"It's now imperative that we move forward with equal zeal to ensure a successful post-auction transition, including a smooth and efficient repacking process", Pai said.