As expected, the list of bidders for the FCC's AWS-3 spectrum auction includes heavyweight wireless carriers Verizon Wireless (NYSE: VZ), AT&T Mobility (NYSE: T) and T-Mobile US (NYSE: TMUS), as well as Dish Network (NASDAQ: DISH), according to a list of bidders released by the FCC. The list also includes a number of smaller wireless carriers looking to get chunks of spectrum that are divided along smaller geographic areas.
The FCC said it received 80 applications for the AWS-3 auction, which will start Nov. 13 and will be the most significant airwaves auction since the 700 MHz auction in 2008. The commission said 33 applicants submitted completed applications and 47 submitted incomplete ones; the companies that submitted incomplete applications will have until Oct. 15 to correct and complete their applications. Sprint (NYSE: S) said in September that it would sit out the AWS-3 auction.
According to Reuters, Dish applied to bid in the auction as American AWS-3 Wireless I LLC, and also disclosed joint bidding arrangements with SNR Wireless LicenseCo LLC and Northstar Wireless LLC, which then also had to note their ownership and other information.
SNR and Northstar's applications appeared to be incomplete, as did AT&T's. However, that is often because of minor inaccuracies or bureaucratic missteps. In all likelihood AT&T and the other companies will correct and submit completed applications before the deadline. Applicants need to make upfront payments by Oct. 15 as well to secure their participation in the auction.
The FCC has set a total reserve price of $10.587 billion for the AWS-3 auction. The 1695-1710 MHz band will be unpaired spectrum used for low-power uplink operations. The 1755-1780 MHz band will be licensed for low-power uplink operations and will be paired with the 2155-2180 MHz band, which is unencumbered by federal users, for downlink operations.
"There are fewer bidders than in the AWS-1 and 700MHz auctions; however, there are sufficient large, well-funded bidders to make the auction competitive, and the bidders need for spectrum is far more acute now than it was before," New Street Research analysts Jonathan Chaplin, Spencer Kurn, Zach Monsma and Vivek Stalam wrote in a research note. "Some will be disappointed that there are no big, surprise bidders, like Google (we are a little disappointed, although we didn't really expect it). We have assumed a value of $1.50/MHz-POP for AWS-3 and the bidders list doesn't really change our view one way or the other."
What complicates the AWS-3 auction is that two chunks of spectrum that will be auctioned are currently used by federal agencies, including the Department of Defense. In most cases, federal spectrum users will have to exit the 1695-1710 MHz and 1755-1780 MHz bands or geographically share them with commercial users. In July, the FCC and the National Telecommunications and Information Administration issued a 43-page public notice outlining coordination procedures for the AWS-3 bands.
In September, the Department of Defense pledged to do what it could to reduce the size of coordination zones in the 1755-1780 MHz band to enable greater access to shared spectrum by commercial operations. That pledge was included in a recently released report from the government, which was aimed at helping potential bidders assess how to proceed in order to coordinate their spectrum needs with incumbent DoD licensees in the 1755-1780 MHz band.
The AWS-3 auction will have two sub-bands, each with its own band plan:
- One of the sub-bands consists of one unpaired 5 MHz block (1695-1700 MHz) and one unpaired 10 MHz block (1700-1710 MHz), licensed in Economic Area (EA) geographies.
- The other sub-band consists of paired spectrum. It includes one 5x5 MHz block (1755-1760 and 2155-2160 MHz) licensed in Cellular Market Area (CMA) geographies, and two 5x5 MHz blocks (1760-1765 and 2160-2165 MHz, and then 1765-1770 and 2165-2170 MHz) licensed in EA geographies. And finally there is one 10x10 MHz block (1770-1780 and 2170-2180 MHz) licensed on an EA basis.
The fact that some of the spectrum will be auctioned off in smaller CMA geographies is a boon to smaller and regional carriers, since they can bid on licenses in areas that reflect their smaller network footprints. The Competitive Carriers Association lobbied hard for the FCC to include the CMA license sizes.
Some of the smaller carriers that submitted complete applications include Eagle Telephone System, which operates Snake River PCS; Pioneer Telephone Cooperative, which runs Pioneer Cellular; and SI Wireless. Smaller carriers that submitted incomplete applications include Bluegrass Wireless, which operates Bluegrass Cellular; Nemont's Sagebrush Cellular; and VTel Wireless.
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