For a payment of nearly $8 billion, T-Mobile yesterday potentially expanded its wireless service reach to customers across the U.S. and Puerto Rico. Its acquisition of low-band spectrum came as the Federal Communication Commission (FCC) wrapped up an historic $19.8 billion auction of airwaves voluntarily relinquished by U.S. television broadcasters.
Set in motion five years ago as part of the federal Middle Class Tax Relief and Job Creation Act, the FCC auction was aimed at reallocating spectrum to better serve today's wireless communications demands. Television broadcasters that gave up portions of their low-band spectrum for auction will receive just over $10 billion in proceeds while the U.S. government plans to use more than $7 billion of the remaining proceeds to reduce the federal deficit.
In addition to T-Mobile, other companies acquiring spectrum through the FCC auction include Dish, which paid a total of $6.2 billion, and Comcast, which paid $1.7 billion. Of the other big four wireless carriers, Sprint and Verizon did not participate, while AT&T spent just $910 million for reallocated spectrum.
'Spectrum Mother Lode'
In a video blog released after the conclusion of the auction, T-Mobile president and CEO John Legere said his company acquired "the spectrum mother lode," 45 percent of all the low-band spectrum on offer from the FCC. That acquisition quadruples T-Mobile's low-band holdings nationwide, he said.
"It's the equivalent of beachfront spectrum, the stuff that works better in buildings and travels further from the tower," Legere added.
In addition to providing better communication through walls and over long distances, more low-band spectrum in the 600 MHz range will enable wireless service providers to ease congestion and lay the groundwork for 5G connectivity, according to the FCC. A total of 50 bidders acquired 70 MHz of spectrum through the auction, with another 14 MHz available for unlicensed use and wireless microphones, the FCC said.
Many of the television broadcasters relinquishing spectrum are doing so in duopoly markets where they own two stations. NBC, for example, plans to keep the channels with better coverage in markets, such as New York, Chicago and Philadelphia, and share that coverage with other channels whose spectrum was auctioned off.
'A Long Time Coming'
Over the next 39 months, most of the 175 television stations that gave up bandwidth for the auction will begin the transition to new channel assignments, while 12 are expected to go off the air.
Wireless providers that acquired low-band spectrum in the auction will have as many as 12 years to begin using that bandwidth for services, although Legere said T-Mobile expects to begin "lighting up" its new airwave holdings later this year.
"This day has been a long time coming," FCC chairman Ajit Pai said in a statement after the auction results were announced. "While we celebrate reaching the official close of the auction, there is still much work ahead of us. It's now imperative that we move forward with equal zeal to ensure a successful post-auction transition, including a smooth and efficient repacking process."