$45B for Spectrum, Oh My!

The FCC’s AWS-3 auction really brought in the cash… After 341 rounds of bidding closed yesterday, the total price tag apparently came to $44.899B, nearly four and a half times the reserve price and twice what observers had been expecting. 

What we don’t know quite yet is just who spent how much. To get that high, though, the big guys must have really opened their wallets.  It seems likely that the deep pockets at Verizon and AT&T will be substantially less full, although there could be a few surprise big spenders in there yet.

One might wonder at the industry’s willingness to shell out for spectrum on the eve of a possible application of Title II to the internet. After all, one of the main arguments against net neutrality is the reduced incentive to invest in network expansions. But with the ongoing explosion of mobile data, having the spectrum available to handle the flood is table stakes. And there are only so many chances to get it.

A big auction could have a ripple effect on the rest of the sector.  With the big carriers spending billions more on wireless than expected, it suggests that they’ll have even less interest in spending on the wireline side than ever.  That could open up further opportunities for alternative providers and cable MSOs in both the consumer and enterprise sectors.

 

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Categories: Financials · Wireless