FCC hopes to raise $10B from AWS-3 auction

The FCC put a $10 billion reserve on the upcoming AWS-3 spectrum auction, which is scheduled to start Nov. 13. The reserve is the minimum amount the FCC must raise through the auction to make it a success. The auction will be the biggest since the FCC's 700 MHz auction in 2008, though it will likely be dwarfed by next year's 600 MHz incentive auction of TV broadcast spectrum.

The AWS-3 auction will span 65 MHz and will include 1,614 licenses in the 1695-1710 MHz, 1755-1780 MHz, and 2155-2180 MHz bands. More than half of those licenses, 880, will be auctioned in the larger "Economic Area" (EA) geographic configuration, while 734 licenses will be auctioned in the smaller "Cellular Market Area" (CMA)  configuration. Some government agencies are currently using the spectrum, and will be moved off.

The licenses will be available in 5x5 MHz and 10x10 MHz blocks--a move likely designed to appeal to both small and large carriers.

Unfortunately for those who are planning to cover the AWS-3 auction, the FCC plans to institute anonymous bidding during the event. That means the identities of the auction bidders won't be released until after the auction is over.

The FCC has not placed any restrictions on bidding in the AWS-3 auction, and a wide range of carriers, including AT&T Mobility (NYSE: T) and Verizon Wireless (NYSE: VZ), have said they expect to participate in the event. In the 600 MHz auction, the FCC has said it will prevent AT&T and Verizon from bidding on up to 30 MHz of spectrum in markets, thus saving that spectrum for smaller carriers like Sprint (NYSE: S), T-Mobile US (NYSE:TMUS) and others.

Revenues from the AWS-3 auction will help fund the construction of the FirstNet public-safety broadband network.

Wireless carriers have generally said that the AWS-3 licenses are ideal for network capacity rather than coverage. The mid-AWS-3 band licenses likely will be used to bolster the speeds and capacity of bidders' LTE networks.

Next year's 600 MHz auction, on the other hand, is expected to raise roughly $20 billion or more because the low-band spectrum is ideal for covering large geographic areas. The event is the FCC's first auction of low-band spectrum since the 700 MHz auction, which was largely dominated by AT&T and Verizon. Those carriers have since used their 700 MHz holdings to build out their respective LTE networks.

Earlier this year the FCC held its H Block auction. Dish Network (NASDAQ: DISH) was the only bidder in that event, and won all the licenses up for auction for $1.564 billion.

For more:
- see this FCC filing PDF
- see this Broadcasting & Cable article

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