Comcast's $1.8M Down Payment for Incentive Auction is Huge

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Currently, the Incentive Auction is taking place, where the FCC is auctioning off the 600MHz spectrum that broadcasters have cleared. This spectrum is hugely important for most wireless carriers, as it is the last time that low-band spectrum (sub-1GHz) will be auctioned off for the foreseeable future. Low-band spectrum is pretty important for wireless carriers, as it allows them to provide better signal indoors, as the lower-band spectrum can penetrate buildings much easier, and cover a wider area than the higher-band spectrum.

There are tons of companies taking part in this auction, and it appears that Comcast put down a rather large down payment for this auction. According to their earnings for the third quarter, the down payment was about $1.8 million, which would enable them to bid on 30MHz of spectrum nationwide. Analysts had only expected them to bid on 10MHz of spectrum nationwide. So this really shows that Comcast is serious about getting into wireless. After all, they did announce that they would be activating their MVNO agreement with Verizon and launching their own wireless service next year (as did Charter).

Comcast's CEO had stated before that the MVNO agreement with Verizon is enough to launch their MVNO next year. However with them looking to pick up more spectrum, they could be seeing some trouble with Verizon. Currently, Verizon has about 114 million customers, and is having capacity issues. Which is leading them to pushing out new technology like LTE-A, quicker to help alleviate some of the traffic that they are currently experiencing. Typically, MVNO's get the short end of the stick, so to speak, when it comes to capacity. On every tower, carriers prioritize their postpaid customers first, followed by prepaid and then MVNO customers. Which means that if a customer using Comcast's wireless service is on a busy Verizon tower, they could see very, very slow speeds. And in some cases, they may not even be able to connect. So it appears that Comcast is taking that into account with this auction. However, keep in mind that they won't have this spectrum available or even put into use before their wireless service rolls out next year.

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