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Congress close to green lighting spectrum auctions as Verizon and AT&T get ready to bid high

Congress close to green lighting spectrum auctions as Verizon and AT&T get ready to bid high
Do you remember the reason why AT&T was willing to spend $39 billion for T-Mobile? AT&T was going after the wireless spectrum owned by the nation's fourth largest carrier. With the amazing growth in the smartphone and tablet markets, data usage is growing rapidly every year and this requires more and more spectrum. That is why both Verizon and AT&T are excited to hear that Congress is on the verge of giving the green light to an auction of some more wireless spectrum currently owned by Uncle Sam. President Obama could sign the legislation that would allow the auction to go through, as soon as this weekend.

Another part of the legislation would allow the FCC to create unlicensed airwaves for Wi-Fi use. Google and Microsoft have been pushing for this white space spectrum for unlicensed applications. According to reports, the television broadcasters' spectrum being auctioned would generate as much as $16 billion. The legislation also wouldn't prevent any company from bidding for spectrum, but could limit the amount of spectrum won by any one company. The FCC and CTIA both have been trying to get an incentive auction which could actually take years to plan before it actually happens.

Not everyone is thrilled about giving up television spectrum to mobile carriers. Gordon Smith, president of the National Association of Broadcasters, said in a statement, "Tens of millions of Americans rely every day on local TV broadcasters for news, entertainment, sports and life-saving weather warnings. We look forward to working with Congress and the FCC to implement an incentive auction program that does not jeopardize that service."

Republican Representative Fred Upton from Michigan, who heads the Energy and Commerce Committee, said that to the extent that these airwaves are used to build the next-gen wireless network, the auction will result in job creation and breakthroughs in technology. The auction also will give $7 billion and spectrum for a national network for emergency workers. This is a direct result of the investigation into 9/11 which resulted in the discovery that more spectrum is necessary for police and firefighters.

Verizon and AT&T were the big winners in a 2008 auction of spectrum for smartphone use. The duo spent a combined $16 billion to purchase the spectrum. Now, 4 years later, both carriers need more spectrum. During an earnings call for the December quarter, AT&T CEO Randall Stephenson said that the carrier's number one issue is availability of spectrum.

After AT&T withdrew from its proposed purchase of T-Mobile, the FCC as a consolidation prize, allowed the carrier to buy some spectrum from Qualcomm in the 700MHz region for $1.9 billion. In December, Verizon paid $3.6 billion to buy 122 AWS spectrum licenses from SpectrumCo.

source: Bloomberg

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posted on 17 Feb 2012, 21:54 2

1. theBankRobber (Posts: 682; Member since: 22 Sep 2011)

2 things. 1 - I don't have cable or anything else and use regular TV everyday, why spend money every month to watch nothing on cable. 2 - if they do sell the spectrum then why the hell isn't Sprint getting on board to buy any? Maybe they have no money left after the down fail of wimax. I don't really know but Verizon and AT&T are going to be even bigger if only those 2 buy up the spectrum. No raoming agreements for 4g LTE means a problem years down the line for Sprint and smaller carriers.

posted on 17 Feb 2012, 23:04 1

3. chack_fu (Posts: 46; Member since: 19 Jan 2009)

I believe Sprint sold off their towers/network years ago.

posted on 17 Feb 2012, 22:57

2. belovedson (Posts: 1052; Member since: 30 Nov 2010)

why doesnt the government lease the spectrum and simply monitor the activity by the different providers

posted on 18 Feb 2012, 09:23 2

7. roscuthiii (Posts: 2233; Member since: 18 Jul 2010)

Because than their would be an uproar of people screaming about the Constitution, Communism, censorship, Big Brother, freedom... all the usual fun stuff by the tin-foilers.

posted on 17 Feb 2012, 23:21

4. no_name (Posts: 1; Member since: 17 Feb 2012)

sprint already has enough spectrum.

posted on 18 Feb 2012, 00:16

5. Exile_One (Posts: 24; Member since: 06 Jan 2012)

tmobile, where are you?

posted on 18 Feb 2012, 02:05 1

6. W.P._Android_in_that_Order (Posts: 208; Member since: 15 Feb 2012)

TMo doesnt care. As part of the failed ATT merger, they won some spectrum from ATT.

posted on 18 Feb 2012, 10:34

8. dallas90733 (Posts: 36; Member since: 06 Mar 2011)

I am wonder why LightSquared isn't on this and demand (since the FCC sold them some crappy spectrum) to switch spectrum or get their money back...lol

posted on 19 Feb 2012, 11:33

9. Stuticus (Posts: 26; Member since: 05 Feb 2012)

Exactly. Why would the government sell the Spectrum to LightSquared, if they wern't going to let them use it? Not cool.

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