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

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.

Comments

Can someone explain...

[Anonymous Coward]

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.

Re:Can someone explain...

[NotInHere]

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.

Re:LOL

[Karl Cocknozzle]

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.

Renting airwaves

[Drew M.]

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....

Re:Renting airwaves

[schnell]

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?

Bandwidth for High Power Wi-Fi

[randalware]

Why not ?

Meshing routers could cover large areas cheaply !

Re:LOL

[ATMAvatar]

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!