The Federal Communications Commission auction of Advanced Wireless Services-3 spectrum has accumulated a record-breaking $45 billion in bids, compared to an expected $10 billion the agency predicted would be spent, based on past auction results.
The AWS-3 spectrum includes frequencies in the 1695-1710 MHz, 1755-1780 MHz and 2155-2180 MHz bands.
One might speculate that bidding went so high because carriers have concerns about the outcome of the planned–and postponed–auctions of 600-MHz spectrum presently licensed to TV broadcasters.
Aside from expectations about the growing dominance of video applications and bandwidth requirements, which require an order or two magnitude increase in capacity, mobile service providers might have concluded it was too risky to wait for the 2016 incentive auctions for 600-MHz frequencies.
And though some had argued Verizon Communications would not bid too aggressively, as it might have considered a deal to acquire spectrum some other way, such as buying Dish Network spectrum, Verizon seems at the moment to have bid significantly, though perhaps not as heavily as AT&T probably did.
If so, it likely will be because AT&T wanted to create a nationwide footprint of 10 MHz by 10 MHz channels, compared to the 5 MHz x 5 MHz channels also sold as part of the auction. Observers speculate that Verizon, T-Mobile US and Dish Network bid primarily for the 5 MHz channels. Sprint did not bid.
Bidders might also have concluded that the 600-MHz auctions, in addition to being expensive (because bids have to be high enough to convince broadcasters to give up the spectrum), would produce uneven spectrum allocations in local markets.
National mobile service providers prefer consistent bandwidth allocations across all their key markets, as that allows marketing of consistent end user experience and more-uniform speed offers.
