The FCC's AWS-3 (Advanced Wireless Services) has now passed twenty four rounds of bidding and the amount has topped $31 billion, already $12 billion more than the 2008 700 MHz spectrum auction and materially more than analysts had predicted would be raised by the auction. Reports indicate that bidding activity has slowed down, which indicates that the auction is starting to wind down. According to the FCC, the highest provisional winning bid is close to $1.9 billion for a 10 by 10 MHz license of paired AWS-3 spectrum covering New York City. A license covering the Los Angeles city area attracted a shade over $1.5 billion in round twenty. These figures illustrate how the bigger two carriers - AT&T and Verizon Wireless - value the spectrum. And we're seen reports that Dish Network has been deliberately bidding up prices, partially because it will polish the valuation of their own spectrum. The paired spectrum in the AWS-3 auction operates in the 1,760 MHz for the uplink part and the 2,165 MHz part for the download link. The unpaired uplink frequency is at the 1,700 MHz point.
Now that the auctions are slowing down, analysts are starting to piece together the potential amount that each carrier will spend. Estimates are currently that both AT&T and Verizon will spend $14.5 billion in total and T-Mobile USA will spend just $1.4 billion. Sprint decided to sit out these auctions on the grounds that any spectrum it wins, it may be required to hand back. It's possible that because these auctions are raising more than originally expected, the value of Sprint's spectrum will increase: all boats rise in a rising tide. New Street analysts believe that mid-band spectrum is worth more than originally believed and that the 2.5 GHz frequency "should probably still trade at a discount to mid-band, but perhaps not as much" - in other words, it's worth more.
Another conclusion drawn from the higher value of the auctions is that the spectrum is both needed and, given the amount paid, may well be deployed sooner than later. And this is good news for customers, because it's us customers who will eventually be paying for the licensesso let's get the benefit sooner rather than later.