On Wednesday, the Federal Communications Commission announced the winners of an 81 billion dollar auction for the license to use essential radio waves ideal for 5G.
The big winners were Verizon and AT&T. They need these radio waves to build 5G networks, which are significantly faster than current wireless service.
Verizon offered nearly $ 45.5 billion for the radio waves through its Cellco Partnership subsidiary. AT&T offered $ 23.4 billion through AT&T Spectrum Frontiers. The third largest US airline, T-Mobile, offered the third largest amount of money at $ 9.3 billion.
The amounts spent by the companies last summer were well above expectations for the auction, which shows the importance of securing the licenses for the radio waves for the airlines.
“These record breaking results underscore the demand and critical need for more licensed mid-band spectrum and demonstrate the importance of developing a robust spectrum auction pipeline,” said Meredith Baker, CTIA CEO, in a statement. CTIA is a trading group that represents the wireless communications industry. The bidders are still in a quiet phase in which they are not allowed to make public comments.
The spectrum of 280 megahertz to be won in this auction is the mid-band spectrum, sometimes referred to as the “goldilocks band”. This means that it works well on 5G networks, combining the ability to transmit large amounts of data at a wavelength that can span long distances.
The results correspond to the previous expectations of the industry. Verizon and AT&T should be the biggest bidders because they didn’t have much mid-band spectrum. T-Mobile had already acquired Mittelband through the merger with Sprint.
Not the entire spectrum was sold at once. The 280 MHz spectrum has been broken down into smaller 20 MHz blocks and further divided into 406 geographic regions. A total of 5,684 licenses could be won.
Overall, the three largest US airlines won 90% of the licenses up for auction.
Here are the top five bidders according to the FCC:
- Cellco partnership: $ 45,454,843,197
- AT&T Spectrum Frontiers LLC: $ 23,406,860,839
- T-Mobile License LLC: $ 9,336,125,147
- United States Cellular Corporation : $ 1,282,641,542
- NewLevel II, LP: $ 1,277,395,688
The five best bidders based on the number of licenses granted were:
- Cellco partnership: 3.511
- AT&T Spectrum Frontiers LLC: 1.621
- United States Cellular Corp..: 254
- T-Mobile License LLC: 142
- Canopy Spectrum, LLC: 84
US Cellular is the fourth largest US airline. NewLevel II represents the private equity firm Grain Management, while Canopy Spectrum is a company between former Wells Fargo analyst Jennifer Fritzsche and investor Edward Moise Jr., according to LightReading.
