On Wednesday, the Federal Communications Commission announced the winners of an $ 81 billion auction for the license to use key radio waves ideal for 5G.
The big winners were Verizon and AT&T. They need this ether to build 5G networks, which are significantly faster than current wireless service.
Verizon has bid nearly $ 45.5 billion on the airwaves through its subsidiary Cellco Partnership. AT&T offered $ 23.4 billion through AT&T Spectrum Frontiers. The third-largest US carrier, T-Mobile, offers the third-largest amount, $ 9.3 billion.
The amounts spent by the companies turned out much higher than expected for last summer’s auction, indicating the importance of obtaining licenses for the ether for the airlines.
“These record-breaking results underscore the demand and critical need for more licensed midband spectrum and demonstrate the importance of developing a robust spectrum auction pipeline,” said CTIA CEO Meredith Baker in a statement. CTIA is a trade group representing the wireless industry. Bidders are still in a quiet period, when they are not allowed to respond in public.
The 280 megahertz spectrum up for grabs in this auction is the midband spectrum, also referred to as the ‘goldilocks band’ meaning it is well suited to 5G networks and combines the ability to transmit massive amounts of data a wavelength that can travel long distances.
The results are in line with previous industry expectations. Verizon and AT&T would be the biggest bidders as they didn’t have much mid-band spectrum. T-Mobile had already acquired some midband through the merger with Sprint.
Not all spectrum was sold at once. The 280 MHz spectrum was split into smaller 20 MHz blocks and further divided into 406 geographic regions. Altogether, there were 5,684 licenses up for grabs.
In total, the three largest US carriers won 90% of the licenses offered at the auction.
These are the five best 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
- Cellular Corporation in the United States : $ 1,282,641,542
- NewLevel II, LP: $ 1,277,395,688
The top five bidders by number of licenses issued were:
- Cellco Partnership: 3.511
- AT&T Spectrum Frontiers LLC: 1.621
- Cellular Corp.: 254
- T-Mobile License LLC: 142
- Awning Spectrum, LLC: 84
US Cellular is the fourth largest US airline. NewLevel II represents private equity firm Grain Management, while Canopy Spectrum is a venture between former Wells Fargo analyst Jennifer Fritzsche and investor Edward Moise Jr., according to LightReading.