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Rural Broadband Providers Among Incentive Auction License Winners

Randy Sukow Apr 13, 2017

T-Mobile was the top bidder in the FCC’s year-long TV incentive auction. According to the list of license winners the Commission released today, T-Mobile was the high bidder on 1,525 licenses for total bids of nearly $8 billion. The low-frequency, 600 MHz licenses from the incentive auction could provide a platform for very fast 5G mobile broadband services in the future.

“This day has been a long time coming,” said FCC Chairman Ajit Pai in a statement. “We congratulate all bidders who were successful in the incentive auction, and we applaud all of those past and present Commission staffers who worked so diligently on every aspect of this complex undertaking. We have only reached this point because of their tremendous skill and dedication to this groundbreaking endeavor.”

Rural and small companies competed for licenses in remote parts of the nation. The list shows 27 Internet providers classified “rural” participated in the auction and qualified for a 15 percent bidding credit. Out of those 27 bidders, 23 won licenses in the forward auction phase. The NRTC members in that group include:

 

 

 

 

Other than T-Mobile, the other three major national mobile communications providers were not major factors in the auction. Sprint announced well before the auction began that it had ample spectrum and would not participate. Verizon entered the auction, but in the end, was not the high bidder on any licenses. AT&T was the high bidder on a comparatively few 23 licenses for $910 million.

In the end, the incentive auction grossed $19.8 billion in revenue. It was the second largest spectrum auction in the FCC’s history, but attracted much less revenue that forecasters expected before it began. Ten billion dollars out of the total sum goes to TV broadcasters around the country that offered parts of their licensed spectrum for the auction. The rest will go to the U.S. Treasury.

It was the auction that lasted more than a year. Technically, it began in late March 2016, but due to the complex process in the auction rules, actual bidding did not begin until months later. The process called for TV broadcasters to participate in a reverse auction to set a cover price for the spectrum. Wireless service providers then bid on the available spectrum in a forward auction.

There were several stalls and stops as bidders in the forward auction regularly failed to meet the reverse auction cover price and the FCC was forced to restart the process several times. The first bids in the first reverse auction began in July 2016 and the last bid in the final forward auction was in early February 2017. It took another two months to prepare today’s list of winners.

Significantly more preparation lies ahead before any of the winners on today’s list begins using the spectrum. The FCC must now repack the channel assignments of the TV stations that provided spectrum through the reverse auction. The Commission in a press release said that process will take 39 months.

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