Friday, November 28, 2014

The 34 Billion Dollar Radio

Last week companies bid more than a total of $34 billion dollars for six blocks of radio frequency allocations a total of 65 megahertz. The original estimates assumed that bidding would top 11billion, the total ended up being c loser to three times that amount. This sets a new record worthy of the Guinness book. That prior record by the way was the 2008 signal auction that raised $18.9 billion dollars. More here.

To me this begs a question... who is going to pay for this? While there are officially more mobile devices than people in the world [SOURCE.] In the US the case is even more so. In a population of about 316 million we have some 327 million mobile devices. That works out to about $103 or $108 each depending on if you'd like to count that per person or per device. Auction 97 will be a huge windfall for the federal government. Verizon Wireless and AT&T are generally believed to be the biggest buyers. The 65 MHz include
  • Block A1: 1695-1700 MHz (5 MHz)
  • Block B1: 1700-1710 MHz (10 MHz)
  • Block G: 1755-1760/2155-2160 MHz (10 MHz)
  • Block H: 1760-1765/2160-2165 MHz (10 MHz)
  • Block I: 1765-1770/2165-2170 MHz (10 MHz)
  • Block J: 1770-1780/2170-2180 MHz (20MHz)

Now we all know there is no more "new" spectrum out there. Spectrum assignments have to be "reallocated" in order for them to be unoccupied for a sale. These frequencies are currently occupied by government agencies, including the military.  Not all of these groups were eager to pull up stakes. Many believe the AWS-3 bands (Advanced Wireless Services) as they are called may still be occupied post-sale. Auction 97 will be a huge windfall for the federal government so I expect the FCC to evict the current occupants with haste. More here.

About $7 billion or about 20% of the total will be dedicated to the implementation of FirstNet. FirstNet is reputed to be a nationwide public-safety communications network. I'm sure I'll have something to say about that as well.