Incumbents Big Winners in 700 MHz Auction
The FCC recently announced the results of auctions for newly available 700 MHz radio spectrum. Altogether, 1090 licenses were sold to 101 different bidders. Over $19 billion was raised by the auction – an amount that far exceeds the sum raised in any single spectrum previously conducted and went beyond Congressional estimates by about $9 billion.
The biggest winners of the auction were the incumbent providers, with Verizon Wireless purchasing licenses covering 475 million POPS (population) for $9.63 billion, and AT&T Mobility purchasing licenses covering 175.8 million POPS for $6.64 billion. Combined, the two companies were responsible for over $16.25 billion of the approximately $19.6 billion spent by winning bidders. As expected, Google did not win any of the C block licenses. It had bid $4.7 billion on the 8-region package covering all 50 states, but lost to Verizon for 7 of those regions and to Triad-700 for
The spectrum, which is presently used for UHF television broadcasts, will be returned to the FCC next year as a result of the conversion to digital television. The FCC intends to use the money raised in the auction to aid in that conversion. Among the benefits of this spectrum, it is believed that the 700 MHz frequencies will penetrate buildings better than current cellular service, which operates between 850 and 1900 MHz, thereby allowing greater reception and service within buildings than is currently available. In addition to increased quality, it is expected that the new spectrum will lead to greater choices for consumers in both devices and services.
One block of spectrum, the "D-block," was not purchased as no bidder reached the FCC's reserve price for the auction. The FCC is currently considering how to go about re-auctioning that block.
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