January 22, 2014
The Federal Communications Commission is scheduled to conduct its first major auction of wireless airwaves in six years today. Telecom analysts at New Street Research estimate that national wireless carriers AT&T, Verizon Wireless, Sprint and T-Mobile — along with satellite TV operator Dish Network — will spend at least $46 billion on spectrum over the next two years in a series of auctions. Next year, the government plans to sell coveted spectrum in the 600 megahertz band, used by TV stations, to be resold for wireless use.
“In the time since the U.S. government’s last major spectrum auction in 2008, Apple Inc.’s iPhone has grown into an industry pacesetter, smartphones built on Google Inc.’s Android operating software have taken off, and mobile data use has exploded,” reports The Wall Street Journal. “The government auctions will free up valuable airwaves, requiring a major deployment of capital by the industry that recently has invested billions of dollars to build out new fourth-generation networks.”
AT&T and Verizon Wireless currently control the majority of cheaper-to-deploy low-band spectrum, which is better suited for covering wide distances and penetrating obstructions. Sprint and T-Mobile are eager to get more low-band spectrum to compete with the larger carriers.
“This week, the FCC seeks to get at least $1.6 billion when it auctions off a slice of spectrum called the H block, which includes two high-frequency bands,” notes the article. “Dish is the only major company signed up to take part and is largely expected to win the largest share of the licenses after the carriers declined to participate.”
The government will begin selling rights to higher band AWS-3 frequencies later this year, followed by spectrum in the 600 megahertz band currently used by TV stations, which is the lowest and most valuable frequency sold yet.
“Companies have a long view when it comes to spectrum because they need to install equipment on their cell towers and wait for new handsets to be outfitted with compatible radios before using the new airwaves,” explains WSJ. “The trick is making sure there is enough capacity to meet demand before users can detect problems.”