Tight carrier budgets may lead to disappointing 600 MHz auction revenues for FCC

The FCC's upcoming auction of 600 MHz spectrum may net less money for the government than is expected, according to a report from Bloomberg Business. Pricing wars and slowing growth among wireless carriers "have left some potential bidders cash-constrained," the piece notes, and the auction may generate only $33 billion -- far short of estimates that have ranged from $45 billion to $85 billion.

"I'd say $33 billion is a relatively small number, but if you look at the [wireless carrier] balance sheets, they can't go much beyond that," analyst Jennifer Fritzsche of Wells Fargo Securities told Bloomberg Business. "The only way it gets bigger is if there's some dark horse bidder like a private investor."

Don't count out a dark horse, though, particularly given carriers' constrained budgets. A cable company such as Comcast or Charter Communications could play ball, Google remains a potential bidder, and investor Chamath Palihapitiya is backing a company called Rama looking to participate. Given the value of the airwaves at stake, in fact, FCC Chairman Tom Wheeler recently said he expects the auction to be a "spectrum extravaganza." Article

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