The one thing that carriers like AT&T, Verizon, T-Mobile and Sprint all need to survive is spectrum. You can have the best viral marketing campaigner in history (Hi, John) but if you don't have the spectrum, then you can't secure coverage for those customers flocking to your network. As such, spectrum auctions, the rights to broadcast over certain wavelengths have become big earners for the FCC. As carriers look to get their hands on more and more spectrum to keep their networks going, it's no surprise that the sought after 600 Mhz auction – to be held next year – is already shaping up to be a pricey one.
600 Mhz spectrum is sought after because of its ability to work well over long distances and penetrate buildings better, thus increasing coverage over all and especially in cities. The problem with 600 Mhz right now is that a number of TV stations are still using it for their broadcasts, as such the FCC needs to convince these stations that it's worth selling up their spectrum. To do that, it looks the FCC has set the opening bids – amounts required to even place a bid on the spectrum – higher than many originally thought. Up and down the country, this 600 Mhz spectrum is not going to be cheap. Cities like Chicago were thought to have opening bids of $120 Million, now that's $520 Million, with nearby New York being a massive $660 Million. Over on the West Coast, 600 Mhz spectrum is to open at around $560 Million instead of the $340 Million previously thought.
This is a pretty big auction that's to be held next year, as spectrum like the 700 Mhz that T-Mobile is to start using in some markets later this year secure better penetration through buildings and should deliver better coverage throughout dense areas. Of course, with the opening bids set quite as high as these, it might not be the spending spree that the AWS-3 auction was. We've got a while yet to wait, but it looks like the FCC and TV broadcasters all over the country are to make some serious cash next year.