FCC Concludes AWS Spectrum Auction Raising $14 Billion

The Federal Communications Commission announced on Monday it has concluded its auction of Advanced Wireless Services (AWS) spectrum after six weeks with over 1,000 licenses sold, raising nearly $14 billion.

T-Mobile USA represented the largest single bidder winning 120 licenses covering most major markets in North America for approximately $4.2 billion, the company announced on Monday. Verizon Wireless and SpectrumCo LLC, a consortium of cable companies that includes Comcast (News - Alert) and Time Warner, were also among the top winners, the agency said.

“Although we cannot envision our lives without access to the Internet, I believe we are only beginning to imagine the way mobile broadband networks will impact our lives, changing the business and entertainment possibilities available to consumers,” FCC (News - Alert) Chairman Kevin J. Martin said in a prepared statement.

Bidding on the wireless spectrum located in the 1710-1755 MHz and 2110-2155 MHz bands began on August 9 after changes were instituted last summer to free up more spectrum to be sold. The agency announced its intentions to auction off the spectrum back in December 2004. Industry officials were quick to applaud FCC Commissioner Kevin Martin for the expedited auction process.

“We greatly appreciate the efforts of Chairman Martin and the Commission in running a smooth and successful auction,” said Steve Largent, President and CEO of CTIA, the trade association. “The industry will put this spectrum to great use in meeting the needs of the American public, and the country will reap the benefits of the almost $14 billion that was raised. We are excited about the future services that will be delivered and we look forward to working with the Commission on the upcoming 700 MHz auction. This spectrum will be a key in providing cutting-edge wireless services that meet the needs of consumers and the Public Safety community. Both of these auctions will highlight the benefits to the American public of assigning spectrum via auction.”

In its press statement, T-Mobile, a unit of Deutsche Telekom (News - Alert), said the licenses cover the continental U.S., Hawaii, Puerto Rico/U.S. Virgin Islands, Alaska and major markets including New York City, Los Angeles and Chicago. However, due to ongoing FCC restrictions, T-Mobile USA and Deutsche Telekom are unable to comment further at this time. The company won’t be able to divulge more information until after the conclusion of the FCC quiet period.

“We want to commend Chairman Martin, the other Commissioners, and the staff of the Wireless Bureau for their efforts in running this important auction in an efficient and timely fashion,” said Robert Dotson, President and CEO, T-Mobile USA.

Back in July, the FCC announced that 168 applicants qualified to bid in the Advanced Wireless Services auction. Other bidders reportedly included satellite television providers DirecTV Group (News - Alert) and EchoStar Communications and Cingular (News - Alert) Wireless.

With the newly acquired spectrum, T-Mobile plans to develop Next-Generation Network (NGN) services much like its industry peer Sprint Nextel. Last month, Sprint announced its plans to deploy Worldwide Interoperability of Microwave Access (WiMAX) as the basis for its 4G network.

The FCC said any unsold licenses will remain held by the FCC and will be made available again in a future auction. All winning bidders must make down payments on their licenses within 10 business days after the release of the Wireless Telecommunications Bureau’s Public Notice announcing the close of the auction.  Winning bidders must also file their long-form applications (FCC Form 601) with the FCC within the same period.  The grant of these licenses to the winning bidders is dependent upon the timely submission of their down payments and final payments, and the review of their long-form applications.

As required by the Commercial Spectrum Enhancement Act (CSEA) for this auction, the FCC set a reserve price to cover the estimated relocation costs of Federal stations occupying 1710-1755 MHz, the frequencies covered by half of each AWS license in the auction.  Net bids had to total at least $2.06 billion in order to conclude the auction in compliance with CSEA and the reserve.

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Robert Liu is Executive Editor at TMCnet. Previously, he was Executive Editor at Jupitermedia and has also written for CNN, A&E, Dow Jones and Bloomberg. For more articles, please visit Robert Liu's columnist page.