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FCC Opens 600-MHz Low-Band Wireless Spectrum Auction

As promised, U.S. telecom regulator Federal Communications Commission (FCC) kicked off the 600 MHz low-band airwaves auction, popularly known as Incentive Auction, on Mar 29, 2016. However, it may take several months for the FCC to release the final outcome of this auction. Only a week ago, the FCC revealed that the Incentive Auction has received applications from as many as 104 companies.

Notable among the bidders are national telecom giants like Verizon Communications Inc. VZ , AT&T Inc. T , T-Mobile US Inc. TMUS , satellite TV operator DISH Network Corp. DISH and cable MSOs (multi service operators) such as Comcast Corp. CMCSA and Liberty Global Inc.

Low-band spectrum is crucial for wireless operators as the signals can be transmitted over longer distances and through brick-and-mortar walls in cities. These airwaves are being freed by TV broadcasters who no longer have any productive use of the same. The freed 600 MHz TV spectrums will instead be utilized by wireless operators to expand and strengthen their 4G LTE (Long-Term Evolution) networks as well as for the upcoming 5G wireless standard.

The TV broadcasters can either relinquish their license and monetize their spectrum holding that are no longer used by them or agree to move to a different frequency-by the end of Mar 2016. The FCC will resell the acquired spectrums to wireless operators, other cable MSOs (multi service operators) or tech firms through competitive bidding.

Notably, the FCC had collected a substantial $45 billion approximately from the AWS-3 spectrum auction that was concluded in Jan 2015. The AWS-3 spectrum auction had received 80 applications. Given the significant number of applications this time, the FCC expects its upcoming low-band airwave auction to be a runaway hit. The Congressional Budget Office has estimated that the Incentive Auction will generate a net value of around $25 billion after compensating the TV broadcasters.

The 600 MHz airwaves auction, was initially supposed to have taken place in 2014. However it was postponed owing to the complexity faced in designing the auction rules and related legal issues. In Jan 2016, FCC chairman Tom Wheeler expressed confidence that the Incentive Auction is slated to be the "world's largest spectrum auction that has ever taken place."

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AT&T INC (T): Free Stock Analysis Report

VERIZON COMM (VZ): Free Stock Analysis Report

DISH NETWORK CP (DISH): Free Stock Analysis Report

COMCAST CORP A (CMCSA): Free Stock Analysis Report

T-MOBILE US INC (TMUS): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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