FCC's 600MHz spectrum auction begins August 16th; total bidding must exceed $86.4 billion

FCC's 600MHz spectrum auction begins August 16th; total bidding must exceed $86.4 billion
The FCC announced today that 62 bidders have made their upfront payments related to the auction of 600MHz spectrum for wireless communications. No surprise, payments have been received from Verizon, T-Mobile, AT&T, Dish Network and Comcast among others. The first stage of the auction helped the FCC come up with a "bogey" of $86.4 billion. That amount of money must be bid by all of the winning participants of the 126MHz in airwaves up for bid. The spectrum is being reconfigured so that it can be used for mobile communications.

The bogey was originally expected to total $30 billion. If the forward auctions, which start on August 16th, don't generate at least $86.4 billion in winning bids, the FCC will hold a new reverse auction with the television broadcasters for a lower amount of spectrum. The 600MHz spectrum is considered to be low-frequency, which explains the heavy demand by carriers. Low-frequency spectrum produces signals that travel farther and penetrate buildings better.

AT&T and T-Mobile have reportedly budgeted $10 billion and $8 billion for the auction, respectively. But that was well before the reverse auction was held. The bottom line is that even outfits like Verizon, AT&T and T-Mobile can't afford to bid for spectrum at what looks to be very inflated prices. If additional auctions are required, the entire process could drag well into 2017.

source: Reuters

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6 Comments

1. eN16HTMAR3

Posts: 253; Member since: Oct 08, 2013

$86.4 billion! LOL.....

2. theguy2345

Posts: 1216; Member since: Jun 24, 2014

I'm gonna buy it *Takes out wallet and the only thing that comes out is dust, because that's all I have* FCC- Sold! To That guy!

3. JMartin22

Posts: 2369; Member since: Apr 30, 2013

That's kind of ludicrous. Where did they come up with this arbitrary baseline. Seems unreasonable.

5. Alan01

Posts: 603; Member since: Mar 21, 2012

The baseline is actually determined using a reverse auction..."During this part of the process, the FCC and the television broadcasters go through several rounds of bidding until it the agency is able to purchase the most amount of spectrum at the lowest price." Regards, Alan F.

4. JMartin22

Posts: 2369; Member since: Apr 30, 2013

Edit: double post

6. jeneral

Posts: 3; Member since: Mar 04, 2015

This article is mistaken. The spectrum is currently in use by various OTA TV broadcasters. It will only stop being used if the buyers meet the amount they're asking for in return for their allotted 'channels'.

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