February 27, 2014, 7:39 PM — The bidding has stopped in a US$1.56 billion auction of wireless spectrum licenses across the U.S., and satellite operator Dish Network appears to be the winner.
Dish pledged in advance to pay the $1.56 billion reserve price for the so-called H Block, and in the end the auction hit exactly that level. The participants were anonymous, but the final price and the fact that one bidder dominated the proceedings from the beginning show that Dish was the winner, analyst Tim Farrar of TMF Associates said. The auction rules call for the FCC to release the names of the winner or winners shortly after bidding closes.
The H Block is small by the standards of today's high-powered LTE networks in the U.S., consisting of just 5MHz for sending data downstream to mobile devices and 5MHz for users to send their own content and requests up to the network. Most service providers like to have at least twice that. However, the auctioned licenses are intended to reach effectively the entire U.S. population.
It was the first major FCC spectrum auction since 2008. The auction rules allow the H Block to be used for any land-based wireless service, either fixed or mobile. Winners will have to reach 40 percent of the people in their area within four years and 75 percent within 10 years.
The prices paid for the licenses varied based on the region and the number of potential users. The lowest bid was $10,000 for a license in American Samoa and the highest was almost $217 million for one covering a large area around New York City.
The spectrum could be very valuable to Dish or Sprint, both of which have other, larger blocks nearby, Farrar said. Combining it with those frequencies would open up various ways to take advantage of the spectrum.
But don't expect Dish to become a big new rival taking on the country's four major wireless operators. The company is unlikely to launch a mobile service by itself in today's U.S. mobile market. Sprint and T-Mobile USA are fighting tooth and nail as it is, in a market dominated by the much larger Verizon and AT&T. Instead, Dish is more likely to work with a partner.