AT&T, Verizon, Dish Network Big Spenders in FCC Spectrum Auction
In a rather quiet affair, the Federal Communications Commission (FCC) concluded a record-setting telecommunications spectrum auction last week, raising $44.9 billion. The winners? Well, they won't surprise you.
Auction 97 wrapped up last Thursday, with major players from all over the industry bidding over AWS-3 airwaves. Wireless carriers Verizon, AT&T, and T-Mobile were on hand to snatch up some of the spectrums offered as well as satellite-TV provider Dish Network. The FCC says it plans to use $7 billion of the proceeds towards the nation's first broadband public safety network.
The big spender turns out to be AT&T. According to FCC data, AT&T spent almost $18.2 billion for 251 licenses, including a large catch in the New York City metro area. Verizon, meanwhile, churned out $10.4 billion for 181 licenses, and T-Mobile, the only other notable carrier spender, shelled out $1.7 billion. Dish Network was the second-largest spender overall thanks to $13.3 billion in bids.
Auction 97 was the largest spectrum auction to date, easily eclipsing the 2008 700MHz auction that raked in $19.1 billion total. AT&T nearly outspent the entire 2008 class on its own this time around, spending almost three times more this year. Verizon spent around $9.3 billion in 2008.
While successful, Auction 97 highlights the growing discrepancy in the U.S. wireless industry. Spending by AT&T and Verizon eclipses everyone else's (except Dish Network's) by far, and only serves to widen the gap between the nation's two largest carriers and Sprint (third place) and T-Mobile (fourth). Sprint was absent from the auction, but is expected to take part in future endeavors.
Both AT&T and Verizon boast customer bases that are big enough to outweigh even a combined Sprint-and-T-Mobile company. While there are many reasons for why this has happened, it mainly means that those trying to play catch-up are in dire need of more airwaves. Sprint and T-Mobile networks are known for poor coverage in rural and suburban areas away from large cities, and the only way to improve that is with more spectrum. With AT&T and Verizon grabbing more and more airwaves, expanding and catching up simply becomes harder to anyone but them, tilting the balance of the industry in their favor.
Luckily, there's still plenty more on the horizon, including a highly anticipated 600MHz spectrum auction planned for 2016. Low frequencies such as 600MHz are coveted because they allow for expansion over large swaths of the United States, and would greatly boost networks such as Sprint's or T-Mobile's.
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