Wireless carrier T-Mobile, satellite TV service Dish Network, and cable giant Comcast were among the big winners in the latest federal airwave rights auction on Thursday.
The federal government is hoping the new airwave rights will allow carriers to ease congestion on their mobile networks, which are increasingly overwhelmed by smartphone users watching streaming videos and uploading their own video to social networks like Snapchat and Instagram. But because the auction was for rights currently owned by TV stations, it could take a few years before the carriers will be able to get access to all of the new airwaves.
T-Mobile (TMUS) won the most licenses, spending $8 billion for more than 1,500 blocks of spectrum spread across over 400 markets, the Federal Communications Commission said on Thursday. Dish (DISH) won the second-most licenses, spending $6.2 billion for 486 blocks of airwaves. An affiliate of Comcast (CMCSA) won 73 blocks of spectrum in 72 markets for $1.7 billion, the FCC said.
T-Mobile said it planned to get much of its winning spectrum, which is in the 600 MHz band, in use this year. “T-Mobile expects 1 million+ sq miles of 600 MHz will clear in 2017 AND we will begin deployment this year in new & existing markets,” T-Mobile’s chief technology officer Neville Ray said on Twitter. Subscribers will also need phones capable of communicating in the new band, which will be available later this year, Ray said.
Comcast last week disclosed details of its planned wireless phone service, which mainly relies on leased airwaves from Verizon. Its new purchases will eventually be available to bolster its network.
But analyst Craig Moffett said he was surprised Comcast didn’t spend three or four times more money. The cable company only won licenses in the same areas where it offers TV and Internet service, including New York, Chicago, San Francisco, and Philadelphia, Moffett noted. It didn’t win licenses in other major cities such as Los Angeles or Dallas.
The biggest immediate news from the announcement actually does not have to do with which carrier won which licenses, however, according to analyst Jonathan Chaplin of New Street Research.
During the auction, bidders were prohibited from talking with each other about any mergers and acquisitions. Now that prohibition lifts April 27, FCC officials said on Thursday. “The most important result is the fact that we now have 10 business days until the auction quiet period ends and M&A discussions can begin,” Chaplin wrote.
The two largest wireless carriers were not big winners. AT&T spent less than $1 billion to win 23 blocks of spectrum, while Verizon (VZ) did not bid, the FCC said. Sprint (S) did not participate in the auction from the outset.
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The auction raised $20 billion overall, of which about $10 billion will go to the owners of TV stations that sold their broadcast license rights, which will be converted for use by wireless phone networks. Winning bids will have to wait up to 39 months to use the new rights, as the TV stations shift to other frequencies or go off the air.
WWTO, a Chicago-based station, will receive $304 million for its airwave rights, the highest for any individual station, the FCC said.
(Update: This story was updated on April 24 to correct the call sign of the TV station that received the most most money)
