The U.S. telecom regulator Federal Communications Commission (FCC) recently started allocating spectrums to license winners from the recently concluded AWS-3 auction. The AWS-3 spectrum auction was initiated by the FCC on Nov 13, 2014 and has received as many as 70 applications. Altogether, 1,614 AWS-3 licenses have been put up for sale in the 1695-1710 MHz, 1755-1780 MHz and 2155-2180 MHz bands.
Notably, the auction has registered a record-breaking bid value of $44.89 billion, breezing past the regulator’s initial estimate of a little over $10 billion. In 2008, the FCC had conducted a wireless spectrum auction which had accumulated a total of $19.6 billion.
The FCC has so far granted licences to 11 of the 31 winning bidders. This includes major telecom operators such as Verizon Communications Inc. VZ, AT&T Inc. T and T-Mobile US Inc. TMUS as well as regional wireless carriers like Central Texas Telephone Investments, FTC Management Group, Gila River Telecommunications, Pioneer Telephone Cooperative, Ligtel Communications, Michigan Wireless, Nsight Spectrum, and Triangle Communication System. However, DISH Network Corp. DISH, a major spectrum winner, is yet to be assigned any of the spectrum slots.
Meanwhile, AT&T has emerged as the top bidder, spending $18.2 billion followed by DISH Network ($13.3 billion), Verizon ($10.4 billion) and T-Mobile US ($1.8 billion). Interestingly, DISH participated in the auction via three designated entities (DE) – American AWS-3 Wireless, Northstar Wireless, and SNR Wireless. Immediately after the FCC declared the name of the auction winners on Feb 2, 2015, DISH claimed that it is eligible for a 25% discount on the total value of winning bids under FCC's “DE” program.
This implies that DISH will have to pay just around $10 billion to acquire all licenses which it has won. However, FCC Commissioner Mr. Ajit Pai has strongly expressed his reservation about DISH’s practice. He argued that the DE program is aimed at encouraging the participation of small wireless operators in the airwave auction which DISH has taken advantage of.
Notably, DISH is the second largest satellite TV operator in the U.S. Owing to this, the FCC is yet to approve the licenses won by DISH’s subsidiary Northstar Wireless, and SNR Wireless.
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