A total of $86.4 billion is now being requested by the broadcasters in a reverse auction for the 126MHz of spectrums which they agreed to free up in the 600MHz bands.
Licences are then sold by the FCC in a forward auction to the highest bidders. This second phase kicked off on August 16, 2016.
A list of bidders has been published by the US telecoms regulator. Upfront payments have been received from 62 of the 99 approved applicants, including from AT&T, Comcast, DISH Network, Liberty Global, T-Mobile US, and Verizon. 13 of the 62 are eligible for the rural service provider bidding credit of 15% – meaning a discount of 15% on a winning bidder’s bid.
Sprint, which had publicly stated its intention not to bid, was unsurprisingly absent from the list, but there may be interesting developments with Puerto Rico. Docomo Pacific has been approved to bid and is believed to be interested in enhancing its network in the country. America Movil, which had also been linked to the country, was absent from the final list of bidders.
There is vast scepticism as to whether telecom operators will be willing to spend such vast sums on the low-band spectrum or indeed will need more than 80MHz of the available airwaves. If this is the case we could see a reverse auction taking place for a reduced volume of spectrum at lower prices.
“The auction is a market-based mechanism for matching supply with demand. Until the forward bidding concludes, we will not know whether the demand meets the large supply offered by broadcasters,” said Tom Wheeler, FCC chairman. “Depending upon that response, it’s possible that we would need to move to additional stages to find the level where demand meets supply.”
Earlier this year, Wheeler stated that the 600MHz spectrum, which is being seen as a way to aide early 5G deployments, would take years to repurpose for mobile broadband, and the “transition will be a complex, multi-disciplinary effort that will span several years”.
The auction, initially expected to complete by the end of Q3 2016, may well continue into 2017. GTB