The government just wrapped a major auction that’ll shape the future of the Internet
By Brian Fung
Apr 13 2017
T-Mobile, Dish Network, Comcast and AT&T were among the biggest winners of a historic government auction of wireless airwaves, the Federal Communications Commission said Thursday.
The auction will transfer a significant amount of spectrum — the invisible radio waves that carry voice, video and data — from TV stations to companies in other industries eager to build out wireless data networks. For consumers, the results may mean bigger Internet pipes or a faster experience.
T-Mobile spent the most out of all the bidders, dumping $8 billion into the contest. That enabled the company to walk away with new spectrum in virtually every U.S. market, said company chief executive John Legere in a tweet.
Phones that support the new airwave frequencies will likely become available later this year once manufacturers get on board, T-Mobile added. (Winners such as T-Mobile have up to 12 years to begin putting their new airwaves to use. Carriers that fail to meet that target could have their spectrum reclaimed by the FCC.)
The radio waves in question are highly prized because of their ability to travel long distances and to penetrate walls — something that higher frequency waves have difficulty doing.
Comcast spent $1.7 billion on the auction, mostly in larger markets in its own cable footprint, according to Craig Moffett, an analyst at MoffettNathanson. The news comes days after Comcast announced its own cellphone service, Xfinity Mobile, which relies primarily on WiFi for connectivity but could benefit by the addition of cellular spectrum in places without WiFi.
Comcast spent about half as much as analysts expected, while Dish surprised them by bidding $6.2 billion — nearly double initial expectations, said Jonathan Chaplin, an analyst at New Street Research. It’s unclear what Dish chief executive Charlie Ergen intends to do with those airwaves, but analysts have said that the company could seek to sell that wireless real estate to other companies.
To make the auction work, as many as 175 broadcast television stations agreed to give up their place on the airwaves in exchange for a payout. Over the coming months, the vast majority of those stations will be moved to a different spot on the airwaves, with most sharing a channel with another station. Just 12 stations will go off the air entirely, meaning their programming will vanish from viewers’ television screens rather than show up on a different channel.
The television station to win the largest payout was WWTO, a Chicago-based station that will receive $304 million. And New Jersey Public Broadcasting, the biggest winner among noncommercial stations, will receive a total of $332 million for agreeing to relocate two stations. It is unclear what they plan to do with the money.
The first channels to relocate will not do so for another 18 months, according to the FCC. And TV stations that are changing channels or will go off the air will be expected to notify their viewers ahead of time with on-screen banners and other guides.
The auction was billed by federal officials as a once-in-a-lifetime event for cellphone carriers, cable companies and TV stations — an unprecedented opportunity to acquire enormous amounts of high-value, “beachfront” airwaves. After a separate auction for slightly higher-frequency spectrum raised some $45 billion in 2015, a record amount, analysts initially believed that the FCC’s TV spectrum auction would perform similarly.