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FCC Hastens Pace Of AWS-3 Auction Causing Bids To Be Pricier

December 8, 2014 - Written By Nick Sutrich

Spectrum auctions are often something that doesn’t get much publicity or headlines and often go completely unnoticed by the mainstream audience out there.  This is a shame because many times these auctions not only affect your cellular voice and data service but also your pocketbook at the end of the day. The latest round of spectrum auctions takes place in the AWS-3 range, specifically for three blocks: 1695-1710MHz, 1755-1780MHz and 2155-2180MHz. These three blocks are hotly contested right now and have exceeded the initial expectations set forth by the FCC. The initial bidding was set to a reserve of $10 billion and was quickly surpassed as Dish, Verizon and AT&T have continually upped the amount. The bidding went from $24 billion after the first four days of opening the auction block, up to $34 billion just a few days later, and now it’s sitting at a cool $41 billion for the whole spectrum.

This sort of money makes it horrendously difficult for smaller companies to get their own slice of the pie out there and only furthers the foothold Verizon and AT&T have on the market. The FCC has shortened the window of bidding each day now too just to end this whole thing and is now only opening up the auction for 30 minutes at a time at six different times each day. That’s opposed to the previous four one-hour bidding windows per day. The previous bidding round had a whopping total of 104 bids made, showing just how hotly contested this spectrum is right now. All the major players are here and everyone wants this slice to beef up their network, especially with frequencies like the 850MHz spectrum being shut down in 2020.

At the end of the day, this will likely mean a much stronger network in places where the spectrum is available for the winning bidder, but it will also result in more expensive bills for the end customer. In a time when long-held subsidies in the US market are finally being removed thanks to T-Mobile and now Sprint, one wonders how long it will be before we see the same thing happen on Verizon and AT&T.