The FCC (Federal Communication Commission) AWS-3 (Advanced Wireless Services) auction is in full swing and also full of surprises. The AWS-3 auction basically consists of two bands of wireless spectrum. The first is the paired spectrum and the frequencies run from 1755-1780 MHz for the uplink or upload operations and 2155-2180 MHz for the downlink or download operations. The second is the unpaired spectrum with the range of frequencies from 1695-1710 MHz. The reserve price of the FCC for the paired spectrum is $10.7 billion and the reserve price for the unpaired spectrum is $580 million. The reserve price for the paired spectrum has been met and also increased for $310 million by the carriers bidding for the frequencies. The unpaired spectrum wasn’t that lucky as it didn’t even reach the reserve price of $580 million.
The prices for main spectrum continue to rise in the countries metropolitan areas like New York City, Los Angeles, Chicago, Dallas, Boston Philadelphia and San Francisco. The heaviest bidders so far are allegedly Verizon Wireless, AT&T Mobility, T-Mobile US and Dish Networks. It is impossible to absolutely guarantee this statement since the identities of the bidders are confidential. Since all the networks want the paired frequencies so badly it would not be surprising if they end up bidding against one another, by doing that increasing competition and end up paying much more than they originally intended. If all the carriers would want to work together they would already discuss the topic in private and bid on selected subset of frequencies.
It is speculated that Dish is manipulating the system by bidding on the paired spectrum only to gain control over the LightSquared bankruptcy court process because their uplink spectrum is close to the unpaired spectrum and it is worth billions but Dish doesn’t want to pay much more than the $580 million reserve price set by the FCC for the unpaired frequency spectrum ranging from 1695-1710 MHz. If Dish is really playing the game stated above, the FCC is going to receive a lot of criticism and bad press but the longer bidding goes on, the higher the chances for AT&T, Verizon Wireless and T-Mobile are to catch and beat Dish at its own game. The problem is if carriers even have enough money to keep playing this expensive game for licensing frequency spectrums in such big markets. We’ll see what Dish is really up to when all of the bids are closed and the frequencies sold.