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FCC Says TV Airwaves Being Sold For Wireless Use Are Worth $86.4 Billion (reuters.com)

Posted by BeauHD on from the supply-and-demand dept.

An anonymous reader quotes a report from Reuters: The U.S. Federal Communications Commission said on Wednesday the price of 126 MHz of television airwaves taken from broadcasters to be sold for wireless use in an ongoing auction is $86.4 billion. The FCC disclosed the price in a statement after completing the first part of an auction to repurpose low-frequency wireless spectrum relinquished by television broadcasters. The so-called "broadcast incentive" spectrum auction is one of the commission's most complex and ambitious to date. In this round, called a reverse auction, broadcasters competed to give up spectrum to the FCC for the lowest price. In the next stage, the forward auction, wireless and other companies will bid to buy the airwaves for the highest price. If wireless companies are unwilling to pay $86.4 billion, the FCC may have to hold another round of bidding by broadcasters and sell less spectrum than had been expected, analysts said. The Wall Street Journal points out that $86.4 billion is more than the market cap of T-Mobile and Spring combined. It's roughly double the amount raised in the last FCC auction, where ATT spent $18.2 billion and Verizon spent $10.4 billion. It's highly likely we'll see multiple rounds stretching into 2017 that will eventually match the supply with the demand.

39 of 72 comments (clear)

  1. Can someone explain... by Anonymous Coward · · Score: 3, Insightful

    Why this is being sold, rather than leased?

    Shouldn't this just be like a 5-15 year lease to the spectrum for whatever amount the companies are willing to bid?

    'Sale' sounds rather permanent, and divvying up a limited resource, like the airwaves even for ridiculous sums of money like 90 billion, seems rather anti-competitive to me.

    1. Re:Can someone explain... by NotInHere · · Score: 2

      Yeah, they are buying these for all eternity. But I tell you what: instead of recurring lower income, politicians like it better to have bigger sums of money on the table they can decide about.

    2. Re:Can someone explain... by mysidia · · Score: 1

      Companies want to be assured that they are going to be able to recoup those all costs (and it often takes 5+ years to roll out).

      I suggest a lease which lasts for 10 years, and then after the initial period is permanently renewable on a yearly basis with a fee of: 10% of the original lease cost PLUS 15% of the gross revenue of the portion of any commercial operation utilizing the license.

      Also, if another company thinks the license is more valuable and they believe they can provide something of higher utility to the public utilizing that piece of spectrum, then every 10 years an opportunity opens to "Challenge" the lesse to request the spectrum be assigned to them.

      If their intended use is Commercial, then they either require the current lesse to prove they are actively using the allocation for useful commercial purposes of benefit to the public in every County in the united states and auction starts automatically, Or the challenger makes a "Buyout" offer the FCC no less than 1.5x what the current lesse pays per year and at least 2x the current lesse's original payment, and an auction opens to decide who gets to acquire a new 10yr lease.

      If the challenger's intended use is Non-Profit, such as a Public service, or as a Public WiFi offered for a personal or community interest, then they are awarded without cost if there is demonstrable value to the public of a certain level, And the commercial operator might be denied renewal, because use for the public benefit is always to have priority for public property over profiteering, Or restrictions might be added to the commercial entity's lease making the commercial operation a Secondary user, or restricted from operating near certain regions or areas, or at certain times.

    3. Re:Can someone explain... by Obfuscant · · Score: 1

      10% of the original lease cost PLUS 15% of the gross revenue

      Fifteen percent of gross revenue? You're kidding.

      Also, if another company thinks the license is more valuable and they believe they can provide something of higher utility to the public utilizing that piece of spectrum,

      You mean like every competitor would think? And every other user of spectrum, too? They all think they've got a better use.

      prove they are actively using the allocation for useful commercial purposes of benefit to the public in every County in the united states

      Now I know you are trolling. A cell company which has spectrum under this lease in the Portland market has to prove they are doing something beneficial with it to EVERY COUNTY IN THE US?

      If the challenger's intended use is Non-Profit, such as a Public service, or as a Public WiFi offered for a personal or community interest, then they are awarded without cost if there is demonstrable value to the public of a certain level,

      Wow. Simply wow. Take it away from the companies providing cell phone service so that someone can offer "Public WiFi".

    4. Re:Can someone explain... by Blymie · · Score: 1

      What, so you're suggesting that the tax you pay to use cell service increases?

      Certainly, there should be some way to regulate air wave usage. But, just where do those billions come from? Or in this case, your leasing costs?

      Anyone buying those frequencies, must make a profit. Therefore, any cost like this, is in some way or another passed on to the consumer. And, as a fixed cost that can't be optimized/improved/reduced, it's a cost that is universal to all wireless providers.

      Meaning? It's a tax on your bill. *YOU* pay for it, not the wireless providers.

      Why do people approve of a tax on themselves like this?

    5. Re:Can someone explain... by mysidia · · Score: 1

      But, just where do those billions come from? Or in this case, your leasing costs?

      Major telecoms are getting out of the Landline business and into the Cellular business. The reason is not that cell phones are better technology.

      The reason is that it is ridiculously profitable for them.... Land-based telephone lines have regulated pricing; Wireless and Fiber do not.

      If the price controls did not exist for landlines; There would be no 3G or 4G networks. We would still be paying $0.50 a minute for long distance, $0.10 a minute for local calls, and your home phone would be $60 a month instead of $15.

      Broadband internet would start at $50 more a month and cost $0.20 a minute while connected.

    6. Re:Can someone explain... by ChrisMaple · · Score: 1

      ---"'Sale' sounds permanent..."
      I'll bet that's what the TV broadcasters whose channels are gone thought, too.

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      Contribute to civilization: ari.aynrand.org/donate
    7. Re:Can someone explain... by Obfuscant · · Score: 1

      Major telecoms are getting out of the Landline business and into the Cellular business. The reason is not that cell phones are better technology. ... The reason is that it is ridiculously profitable for them.... Land-based telephone lines have regulated pricing; Wireless and Fiber do not.

      This is the first time I've heard fiber referred to as "cellular business".

      They're getting out of the wireline business because it is ridiculously expensive. Maintaining a copper pair to a home is a huge expense. Installing a new one is hard. You have to deal with a huge number of franchising authorities. The costs of labor go nothing but go up. The costs of hardware do nothing but go up.

      Cellular, on the other hand, can set up a tower or two outside a small city and cover the entire city without having to get city approval for anything. Adding a customer is an entry in a database or three. Cheap.

      If the price controls did not exist for landlines; There would be no 3G or 4G networks.

      Wrong. There would be no landline system for most of the US, and where there was many people would have opted out. Those new fangled "telephone thingys" wouldn't have caught on so well. That would leave a much larger starting market for wireless. It's a relatively recent turn of events that people have been abandoning wireline for wireless and increasing wireless demand. Imagine all those people as more likely customers 20 years ago instead of 5.

      We would still be paying $0.50 a minute for long distance, $0.10 a minute for local calls, and your home phone would be $60 a month instead of $15.

      Of course. Just as it used to be under the even tighter controls that were in place when Bell was Ma. You don't believe that public service commissions popped up just as divestiture came along, do you?

    8. Re:Can someone explain... by omnichad · · Score: 1

      buying these for all eternity

      Sure, just like the broadcast TV companies did before that....except they no longer have that spectrum.

  2. Re:LOL by Karl+Cocknozzle · · Score: 3, Interesting

    It's something of a flim-flam, though--they're not "buying" anything, merely purchasing the right to apply for a license that can be revoked. Granted, license revocation is a rare thing, but it's out there does to some degree constrain the operators of licensed broadcast/wireless systems on every band.

    Think of it like this: Any way you issue the licenses, they're valuable. By charging for them, you at least raise some money in exchange for this valuable license, rather than just giving it away for the $295 application fee.

    That said, I'd be thrilled to see a significant portion of this allotment reserved for municipal wireless broadband in "unprofitable" areas. We have to close the internet gap to give our rural neighbors the chance to enjoy the development and growth that connectivity enables.

    --
    Who did what now?
  3. Renting airwaves by Drew+M. · · Score: 5, Insightful

    Why are we selling these airwaves? We should be renting them by the month. This prevents the wastefulness and hoarding of resources by a company that never plans to use them. What if some company buys them all up and never uses them in hopes that they double in price in the next 10 years due to scarcity?

    I said nearly the exact same thing as a solution for keeping the IPV4 address space from running out, as most of the space is currently being hoarded by large organizations that don't need full Class A blocks:
    https://slashdot.org/comments....

    1. Re:Renting airwaves by NotInHere · · Score: 1

      I said nearly the exact same thing as a solution for keeping the IPV4 address space from running out, as most of the space is currently being hoarded by large organizations that don't need full Class A blocks:

      What about ... using ipv6 instead?

    2. Re:Renting airwaves by schnell · · Score: 2

      We should be renting them by the month.

      Will you be changing cellphones every month when your current provider no longer has the lease to the spectrum band you were using? Phones can only support so many radio band filters without increasing size and cost, so different versions are frequently built with support for only the frequency bands used by specific carriers, especially on low-cost phones. You know that the radios on the cellphone towers don't magically support every frequency as well, right? Would you spend large sums of $$$ to buy equipment tuned for a particular spectrum band if you didn't know if you could keep if for the long run (at least the life of the equipment)?

      More importantly, the companies that buy spectrum do so because it becomes an asset with a known, fixed cost. Renting means rates may fluctuate or change (as they must, right? Otherwise the spectrum will not underpriced or overpriced.) Businesses - especially the ones that throw around the big piles of cash needed to stand up wireless networks - don't like having to guess how much their underlying costs will be from month to month.

      I said nearly the exact same thing as a solution for keeping the IPV4 address space from running out

      Do you really want to renumber all your public IPs every month when the rent goes up and your company doesn't want to pay it?

      --
      "95% of all Slashdot .sig quotes are incorrect or completely fabricated." -Benjamin Franklin
    3. Re:Renting airwaves by evilviper · · Score: 1

      Better to remain silent and be thought a fool than to speak and to remove all doubt...

      Why are we selling these airwaves? We should be renting them by the month.

      The airwaves are only licensed. A contract of only months would be moronic, as it takes YEARS to build out any cellular network, and nobody would make the investment without some guarantees that they can keep using them for quite a few years.

      What if some company buys them all up and never uses them in hopes that they double in price in the next 10 years due to scarcity?

      Spectrum has build-out requirements, so they can't stall development. It's also not really theirs to sell. The FCC can and does take it away.

      More than that, since the start of wireless communications, each improvement in the technology has pushed radio into higher and higher frequencies. There's only a few narrow purposes for TV-band spectrum. For most cellular communications, much higher frequencies are actually better in many ways, with these more often just a fallback.

      I said nearly the exact same thing

      Repetition doesn't turn ignorance into insight.

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      Slashdot gets worse every day... Pipedot: News for nerds, without the corporate slant
    4. Re:Renting airwaves by 93+Escort+Wagon · · Score: 1

      I'm holding out for IPv12.

      --
      #DeleteChrome
    5. Re:Renting airwaves by axewolf · · Score: 1

      Why

      hoarding of resources

      That's why....how are grown men so fucking naive?

    6. Re:Renting airwaves by Blymie · · Score: 1

      Renting them by the month now! That's even worse than buddy's overall lease term above!

      You do realise that this money comes from YOU! You, the person that has cell phone service.

      Where else does the carrier get money to pay for the lease?

      The cost of these airwaves should be ZERO. Not one penny.

      Yes, they should be regulated. Yes, if you don't use them, they get pulled.

      But paying for them? Billions and trillions? THAT COMES FROM YOU IN THE END!

    7. Re:Renting airwaves by ChrisMaple · · Score: 1

      Let's see, I've got the use of these airwaves in this area for $100,000,000 this month. I'll just invest $5 billion in hardware so that I can use them. My business plan says I'll break even in 4 years.

      Next month --- What do you mean, the bands I've spent $5.1 billion to use won't be available to me any more?"

      --
      Contribute to civilization: ari.aynrand.org/donate
  4. Re:And for the people... nothing by Anonymous Coward · · Score: 1, Funny

    Good morning. I'm here to defend the FCC. I'm not sure against whom or what... but god dammit... I'm defending them. Thank you for your time.

  5. Re:LOL by Anonymous Coward · · Score: 1

    On behalf of every British Columbian who can't stand seeing your stupid language printed on everything, hurry up, please.

    Ours is the furthest province from yours and we should be the least accommodating of your bastardized fronglish bullshit.

  6. Bandwidth for High Power Wi-Fi by randalware · · Score: 2

    Why not ?

    Meshing routers could cover large areas cheaply !

    --
    This is my opinion based on what little I know and understand of the rumors and lies Thanks, Randal
  7. Re:LOL by Obfuscant · · Score: 1

    That said, I'd be thrilled to see a significant portion of this allotment reserved for municipal wireless broadband in "unprofitable" areas.

    The unprofitable areas are those areas with low population density. Do you know what you don't find in areas with low population density? That's right, municipalities that have money to invest in wireless broadband.

  8. Re:LOL by R3d+M3rcury · · Score: 1

    [...] you stupid english speaking bastards!

    Don't you mean Hanglish?

  9. Re:LOL by hawguy · · Score: 1

    That said, I'd be thrilled to see a significant portion of this allotment reserved for municipal wireless broadband in "unprofitable" areas.

    The unprofitable areas are those areas with low population density. Do you know what you don't find in areas with low population density? That's right, municipalities that have money to invest in wireless broadband.

    Right, when I lived in nearly unpopulated San Francisco and my only choices for internet were Comcast cable and "up to" 1.5mbit AT&T DSL. I didn't really want Comcast (or AT&T for that matter), but I was outside of the range of monkeybrains wireless isp so I was stuck with Comcast.

  10. Re:LOL by Obfuscant · · Score: 1

    Right, when I lived in nearly unpopulated San Francisco

    My bad. I didn't remember that San Francisco is an unprofitable area for wireless telecommunications services. So yes, there's ONE municipality in an unprofitable cellular market that could install wireless broadband.

    Sheesh. Read what you reply to, ok?

  11. Re:LOL by ATMAvatar · · Score: 3, Insightful

    Everything in the USA is becoming either Arabic

    I know, right? It's on our street signs, our currency, and it looks to have even crept into our Slashdot IDs!

    --
    "They that can give up essential liberty to obtain a little temporary safety deserve neither liberty nor safety."
  12. How about repeaters for the digital TV signals? by King_TJ · · Score: 1

    I think a lot of people in rural areas got a raw deal from this digital TV signal upgrade, because it makes it impossible to pick up a lot of stations you used to be able to tune in with the old analog system.

    Where we live, for example? We're about a 70 minute drive away from Washington DC (with many people in town commuting to/from the DC area daily for work), yet you can't pick up the DC network stations over the air. (Well, you *might* get 1 or 2 if you aim the right antenna just the right way -- but you won't get the number of them you did before things went digital.)

    I never understood why repeaters weren't implemented to boost the digital OTA signals, to ensure good coverage? Couldn't a piece of the funds received by selling off the old frequencies go to this?

    1. Re:How about repeaters for the digital TV signals? by CheapEngineer · · Score: 1

      The map was hard enough with full power transmitters - adding 2x more low powers to fill in holes will be nuts to coordinate. Plus, with ATSC TV you can't just put up 'repeaters' on the same frequency - neither will be receivable at the overlap. At that point the 'fill in the bad spots' transmitters need to be on a separate channel, which means you'd have to scan your TV for new sources and could end up with 3-4 copies of the same station in your lineup. Full power DTV transmitters are in the $400-750k range, low powers in the $50-125k range. Double that to run line up a tower, assuming you don't have to build a tower itself.

  13. Spring? by sims+2 · · Score: 1

    What area does spring cover? Ive never heard of them before. Then again maybe they ment sprint.

    --
    Minimum threshold fixed. Thanks!
    1. Re:Spring? by SeaFox · · Score: 1

      What area does spring cover?

      I hear their coverage is eternal, but there is a very low signal to noise ratio.

  14. Re:LOL by ArmoredDragon · · Score: 1

    On behalf of every British Columbian who can't stand seeing your stupid language printed on everything, hurry up, please.

    Ours is the furthest province from yours and we should be the least accommodating of your bastardized fronglish bullshit.

    See, this is exactly why you wildlings will never make it south of the 49th parallel; you're always fighting amongst one another. And guess what? Winter is coming again and you'll be trapped in the frozen wasteland.

  15. Re:And for the people... nothing by MobileTatsu-NJG · · Score: 1

    Just remember, this is the FCC that gives the people exactly 0% of the designated broadcast spectrum. The FCC that is owned, lock stock and barrel by commercial interests.

    I get television broadcast, cellular service, AM/FM/HD radio, wifi, bluetooth, and a whole gaggle of other stuff that I can take for granted because it isn't jammed by all the electronics in my house, including the power supplies to all that stuff. If you want to bitch about not being able to hear the term cunt-shit on the local top-40 station, I'm what you would call a gifted-idiot so I understand you there, but I'm not really sure why they're some enemy to hate in this context. If you think the United States would be better off without them then you should get on a dial-up connection going so I can send you a streaming documentary to watch.

    --

    "I like to lick butts!" by MobileTatsu-NJG (#32700246) (Score:5, Informative)

  16. Re:IMPORTANT NOTE by K.+S.+Kyosuke · · Score: 1

    Actually, no, the best outcome for everyone would be a superintelligent AI doing the smartest decision for us, and also doing all the hard work. That is true because human nature made it so (we want to have fun, not to spend dozens of hours per week toiling away in cramped offices).

    --
    Ezekiel 23:20
  17. Re:LOL by Blymie · · Score: 1

    Actually, it is a tax on the consumer.

    Certainly, there should be some way to regulate air wave usage. But, just where do those billions come from?

    Anyone buying those frequencies, must make a profit. Therefore, any cost like this, is in some way or another passed on to the consumer. And, as a fixed cost that can't be optimized/improved/reduced, it's a cost that is universal to all wireless providers.

    Meaning? It's a tax on your bill. *YOU* pay for it, not the wireless providers.

  18. Re:LOL by ChrisMaple · · Score: 1

    You're claiming that it's unwise to allocate resources to those who can make the best economic use of it. You are further implying either that you in your omniscience know what the best use is, or that corrupt and capricious government will bring about best use.

    Great Britain leaving the E.U. is the best thing that has happened in the world this year, perhaps this decade. The E.U. is becoming a suicidal tyranny, and England is refusing the command to kill itself.

    --
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  19. Re:LOL by rwise2112 · · Score: 1

    Really

    --

    "For every expert, there is an equal and opposite expert"
  20. Re:IMPORTANT NOTE by K.+S.+Kyosuke · · Score: 1

    Thus spoke Pareto.

    --
    Ezekiel 23:20
  21. Re:Cost per person by omnichad · · Score: 1

    You mean less than $2/mo. per person * 10 years? Oh, what exorbitant services, this must involve.

  22. Re:LOL by Karl+Cocknozzle · · Score: 1

    The unprofitable areas are those areas with low population density. Do you know what you don't find in areas with low population density? That's right, municipalities that have money to invest in wireless broadband.

    You're thinking too 1:1. Although it is unlikely that every little podunk town will be able to have their own municipal wireless system, the frequencies in question are utterly pristine, and we have a long history of broadcast engineers sharing these frequencies and not interfering with each other, despite having stations blanketing the country. By positioning a tall enough/correctly engineered station in a central location, many rural communities could share one "system" between them.

    --
    Who did what now?