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AT&T Communications Government United States Technology

Bidding At FCC TV Spectrum Auction May Be Restricted For Large Carriers 91

Posted by samzenpus
from the helping-the-little-guy dept.
An anonymous reader writes "Rumors have surfaced that the Federal Communications Commission (FCC) will restrict bidding at their TV spectrum auction in 2015 to effectively favor smaller carriers. Specifically, when 'auction bidding hits an as-of-yet unknown threshold in a given market, the FCC would set aside up to 30MHz of spectrum in that market. Companies that hold at least one-third of the low-band spectrum in that market then wouldn't be allowed to bid on the 30MHz of spectrum that has been set aside.' Therefore, 'in all band plans less than 70MHz, restricted bidders—specifically AT&T and Verizon (and in a small number of markets, potentially US Cellular or CSpire)—would be limited to bidding for only three blocks.' The rumors may be true since AT&T on Wednesday threatened to not participate in the auction at all as a protest against what it sees as unfair treatment."
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Bidding At FCC TV Spectrum Auction May Be Restricted For Large Carriers

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  • Re:Sale or lease? (Score:4, Informative)

    by mlyle (148697) on Thursday April 17, 2014 @12:55AM (#46776855)

    The argument against shorter-term leases is that you have to invest a lot in infrastructure to make use of the spectrum.

    Most of these licenses that are being bid for in the auction are for ten year terms, I believe.

  • Re:Sale or lease? (Score:5, Informative)

    by schnell (163007) <me@scLAPLACEhnell.net minus math_god> on Thursday April 17, 2014 @12:58AM (#46776869) Homepage

    Why isnt it for lease? Why arent the carriers paying something per year for the use of the spectrum?

    Technically, it is a more like a very long term lease rather than a perpetual sale. Ultimately, those frequencies are still under the discretion of the FCC to allocate or revoke subject to certain conditions.

    To answer your question about why carriers don't "rent" it annually, it's because there is an ecosystem around those frequencies that require huge multi-year investments. Let's say that you're carrier X and you just bought the rights to the LTE "C Block" frequencies. You need to buy hundreds of millions of dollars worth of LTE equipment that runs is the C Block, site your towers to match the RF propagation characteristics of that particular frequency band, have all your smartphone vendors that you commit to buy XXX millions of units from have their devices support that spectrum block, etc. etc. Every radio band that you add to a piece of tower equipment costs money, and adding additional bands to phones takes up motherboard space and adds extra costs, so on both sides there is a monetary cost to supporting additional spectrum bands.

    If you could lose that spectrum next year to another bidder - you have literally spent hundreds of millions of $$$ on equipment and devices that are worthless to you - or, worse - are only worthwhile to customers who will use the network of your competitor who just bought that spectrum. If carriers could not lock up spectrum blocks long term, the uncertainty would mean that they would pay far, far less for it, so the government would extract far less money from them for that spectrum. So "selling" the spectrum under long-term leases means more $$$ for the government vs. trying to "rent" it year-to-year.

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