Published: Sat, April 15, 2017
Culture | By Henry Herrera

$19.8 billion airwaves auction may mean better cell service


This means that ATT and Verizon, who both operate large LTE networks in the 700MHz range were excluded from part of the spectrum being auctioned off.

Verizon's absence, and the strong showing from companies like Comcast that don't now operate cellular networks, is a sign of the changing telecommunications landscape. "Congratulations to the FCC!" said John Legere, president and CEO of T-Mobile. While Qualcomm has announced 600 MHz chipsets, it's not clear that those will make their way into a significant number of phones during 2017. The Congressional Budget Office in 2015 estimated that the current auction would bring in $10 billion to $40 billion, with an expected value of $25 billion, after TV station owners were paid.

T-Mobile ended up with 31MHz nationwide on average, which quadruples its existing low-band spectrum holdings. Not that far behind T-Mobile was Dish Network.

Dish, which has been buying spectrum for years without revealing plans for offering cellular service, spent $6.2 billion for 486 licenses covering the entire US.

Spectrum for auction-70 MHz of licensed and 14 MHz of unlicensed frequencies-was made available through an unprecedented bidding procedure that allowed TV stations to assign a value to their 600 MHz spectrum. That is roughly equal to the $19.6 billion the FCC raised in the 700 MHz auctions back in 2008.

Low-band frequencies, like this 600Mhz spectrum and the 700Mhz spectrum that was auctioned off in 2008, are considered the "beachfront" property of LTE, since it carriers high-speed signals further distances, with better penetration of thick walls and basements than mid-high frequencies, which is where T-Mobile now deploys the fast majority of its LTE network.

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The results, announced Thursday, showed that T-Mobile TMUS, +0.19% was the biggest spender at $8 billion.

One other thing to keep in mind is that T-Mobile paid a ton of cash for this new network expansion.

Dish has always been amassing airwaves and has said it will build a wireless network. In a $7.99 Billion deal, T-Mobile is set to gain 45% of all of the low-band spectrum being auctioned.

"T-Mobile's network is already the fastest, most advanced in the country, and this will take it to a whole new level - and we'll do it fast", said Neville Ray, T-Mobile CTO. The company that spent the third highest amount in the auction was Comcast.

The full list of winning auction bidders is here. If you consider U.S. Cellular a rural carrier, they too fall into that category, having won $328 million worth of spectrum. Without low-band spectrum, it would be impossible to cover many regions of the US economically.

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