The FCC's AWS-3, Advanced Wireless Services, auction kicks off in under two weeks and we've learnt that seventy companies have qualified for the auction. This auction is for blocks of spectrum in the 1,695 MHz to 1,710 MHz, 1,755 MHz to 1,780 MHz and 2,155 MHz to 2,180 MHz bands. We are expecting AT&T, Verizon, T-Mobile USA to bid for spectrum and we reported six weeks ago that Sprint are declining to bid, citing difficulties in being able to keep hold of any spectrum that they successfully win because of their existing high frequency spectrum. We're also expecting dozens of smaller carrier, investment firms and even private (equity) businesses to bid for spectrum. The frequencies up for auction are in the middle to higher frequency ranges that carriers currently use, so will afford higher speed connections but with poorer building penetration and range compared with the low frequency spectrum auction that the FCC, Federal Communications Committee, has recently postponed. This arguably makes the auctions less significant to the bigger players.
The FCC has set a total reserve price for the spectrum auctions of just over $10.5 billion. Each of the frequency blocks is somewhat different from the others; for example, the 1,695 MHz to 1,710 MHz block will be unpaired for low power usage. The 1,755 MHz to 1,780 MHz band is going to be paired up with the 2,155 MHz to 2,180 MHz band for higher performance networks. Different parts of the spectrum are to be subject to regional auctions and in some areas, successful bidders will need to negotiate their spectrum with federal and law enforcement agencies. Much of the AWS-3 frequencies are already in use by the US military and the exact use is not disclosed. The regional breakdown will allow those smaller, regional carriers to effectively bid for coverage and follows some intense lobbying from the Competitive Carriers Association, designed to keep the smaller players competing.
We'll keep you in the loop with the results of the auctions as we hear the results, but we do need to remind readers that in light of the need to share spectrum with US Government users and of course the need to deploy infrastructure, we would not necessarily expect to see the new spectrum used in the short term. We may also see some shakeups following the results and perhaps even roaming deals being struck up between the different carriers.