T-Mobile was the dominant winner in the 600 MHz spectrum auction that ended on March 30, 2017. The Federal Communications Commission announced the results of the auction on April 13.
T-Mobile’s bids of nearly $8 Billion secured about 45 percent of the available spectrum for the third-largest carrier while U.S. Dish Networks bought just over $6 Billion and Comcast bought $1.7 Billion worth of newly available wireless spectrum.
Comcast has recently announced a new mobile phone service that will use the company’s own WiFi hotspots and the Verizon wireless network. This additional spectrum should provide some flexibility for Comcast. Dish Networks has been buying and holding spectrum for years, but has yet to put it to use.
The additional spectrum enables T-Mobile’s wireless service to completely cover the U.S. and Puerto Rico, something the company has not been able to do until now. In addition, the 600 MHz frequencies provide longer range coverage and superior building penetration characteristics compared to frequencies above 1 GHz, which is where T-Mobile’s service frequencies were concentrated.
Once T-Mobile start using frequencies it won in this spectrum auction, its coverage in the U.S. at frequencies below 1 GHz will nearly equal Verizon’s. A company spokesperson has said that T-Mobile will begin building out its network later in 2017. T-Mobile’s 600 MHz coverage map shows that by the end of 2017 the company will be able to reach 100 percent of the United States.
The spectrum that was being auctioned came from television station broadcast frequencies. Those stations are giving up the frequencies that they now use and will either relocate to new frequencies higher in the UHF band or they will go off the air completely. A few television stations have announced channel-sharing plans.
Some of the major sellers of television spectrum include Fox networks and NBC Universal. NBC Universal is owned by Comcast, which bought some of the available spectrum. While the auction is over, the actual transition of those television channels into wireless frequencies will take three years to complete.
Another limiting factor of a move into the 600 MHz spectrum is that there are currently no devices that can operate in those frequencies. While Qualcomm has announced 600 MHz chipsets, it’s not clear that those will make their way into a significant number of phones during 2017.
Still, the nation-wide swath of prized low-band spectrum is critical to T-Mobile, which has struggled to improve its coverage of rural areas, and to improve its signal quality in urban areas. Because signals at these frequencies can cover longer distances more effectively, this will help the carrier reach customers it’s had trouble reaching in the past.
“T-Mobile now has the largest swath of unused low-band spectrum in the country. That is a BFD for our customers!” said T-Mobile CEO John Legere in a prepared statement.
With the additional spectrum, “T-Mobile customers will be able to speed on a brand-new, wide-open wireless freeway, while carrier customers have to crawl along on their clogged, congested low-band freeways.”
“This additional low-band spectrum means the company will be able to expand its LTE network to compete in every corner of the country, strengthen existing LTE coverage and increase capacity to meet customers’ growing demand for mobile data,” Legere stated.
T-Mobile has previously said that it has begun the process of building out its 600 MHz data network, with equipment provided by Ericsson and Nokia, which is already available to wireless companies. T-Mobile has said that it expects to have at least 10 MHz of bandwidth available for use over about one million square miles by the end of 2017.
The only other major wireless company that participated in the auction is AT&T, which picked up a few licenses in urban areas such as New York. The other auction winners are mostly small regional carriers.
The announcement of the winners in the 600 MHz spectrum auction marks the culmination of a process that started 5 years earlier, in 2012. But the process of actually clearing out spectrum so it can be used by wireless carriers will take a while longer.
“Today marks a major accomplishment for the Commission: the ‘auction’ portion of the world’s first incentive auction is officially over,” said FCC Chairman Ajit Pai in a prepared statement. “The reverse and forward auctions have concluded and the results have been announced. But this process is far from over. Now, we begin the post-auction transition period.”
The results will become final when the winning bidders pay the FCC for their frequencies. The FCC will receive about $19 Billion, of which $11 Billion will go to the television stations that are giving up their frequencies and about $8 Billion going to the federal government where it will be used to reduce the deficit.
The spectrum auction will make available a vast amount of bandwidth for personal data communications offered by wireless companies, especially T-Mobile. But the next question is just how long that extra space will last. Considering the insatiable demand for data, it seems to be reasonable to expect new demands in the near future. Is the 500 MHz band next?
However, the real answer is to find new ways to make use of the spectrum that already exists, if only because the supply of spectrum isn’t infinite and there are needs beyond what mobile phone users want.
Spectrum use by today’s mobile phones is far from efficient, so it would seem that the next step by the FCC might be to find ways to improve efficiency for using the spectrum we already have.