AT&T’s decision to dump at least some of the 600 MHz spectrum it picked up during last year’s incentive auction doesn’t at all mean it overestimated the quality of those airwaves, according to Wells Fargo Securities.
FierceWireless was the first to report last week that the nation’s second-largest carrier was preparing to transfer its 60 MHz holdings to LB License Company, an affiliate of Columbia Capital, a Beltway-area venture firm focused on telecom and media. While the filing doesn’t disclose terms of the deal, the website Facticia earlier this week reported LB Spectrum Holdings planned to raise $928 million. AT&T's full FCC filing is available at the bottom of this article.
AT&T was the fourth-biggest bidder during the FCC's incentive auction of TV broadcasters' unwanted 600 MHz licenses, which ended in in early 2017. AT&T spent roughly $910 million on 600 MHz spectrum licenses covering select cities across the country.
Rather than realizing it had overvalued the spectrum out of the gate, though, AT&T may have tapped the brakes on its pursuit of those airwaves as it realized it was likely to win the FirstNet contract, Jennifer Fritzsche of Wells Fargo wrote this morning. That contract—which AT&T eventually locked up—came with its own bounty of low-band spectrum, rendering some of the TV broadcasters’ spectrum redundant.
“After reviewing AT&T’s bidding activity, it is clear to us that AT&T made a strategic decision to top bidding on 600 MHz licenses during Stage 1 Round 22,” Fritzsche wrote in a note to subscribers. “We suspect this was driven by AT&T’s confidence it was going to win the FirstNet contract, along with 20 MHz of 700 MHz it was going to win the FirstNet contract, along 20 MHz of 700 MHz and $6.5 billion that came with it, and opted to deemphasize its auction bidding activity.”