We all know there's a spectrum auction coming up soon, and we also know that the bigger carriers – namely AT&T and Verizon – have an advantage over the smaller guys like Sprint and T-Mobile. Simply because they have more customers, thus they have more money.
The FCC is getting ready to auction off the AWS-3 Spectrum, which is a stronger MHz frequency and is ideal for strong LTE service in a limited area. The FCC is also auctioning off two sub-bands included in this auction. Let's explain exactly what we mean here. The sub-bands are broken into 5MHz and 10MHz bands. The 5MHz bands are 1695-1700MHz and have been structured in such a way that it benefits smaller carriers like T-Mobile and Sprint more than the larger ones. It also brings a pretty small price tag, which makes it easier for a smaller carrier to snatch it up.
Now the larger 10MHz block – 1700-1710MHz – are in what they like to call "Economic Areas" which to the normal person means "Metropolitan areas of interest". It's Metropolitan areas of interest because that's where most people have cash and spend cash, so that's where carriers can make the most money. Makes sense right?
According to Analyst Walter Piecyk from BTIG:
"The 10×10 MHz blocks will appeal to AT&T and Verizon because they are larger and being auctioned in fewer geographic regions, making it easier to build a nationwide spectrum position. The 5×5 MHz block will appeal to T-Mobile, which owns the adjacent spectrum in 20 of the top 35 markets."
T-Mobile has already written a blog post about how the FCC should make the spectrum auction at 5MHz blocks instead of 10MHz blocks and also making it fair for the little guys like T-Mobile and Sprint, since AT&T and Verizon will have an unfair advantage. Currently, the FCC is due to make their ruling on this on March 31st. So we'll know in just a few short weeks what the FCC thinks.