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Airwaves Auction Hits a Whopping $34B as Wireless Carriers Compete for More Spectrum

Image courtesy of (Stuart Miles) / FreeDigitalPhotos.net

Bidding in the Federal Communications Commission’s airwaves auction has hit a record $34 billion — a number far beyond what was expected after the bidding began last week.

Bidding has gone well past the reserve price of $10.5 billion as wireless carriers duke it out for greater access to new airwaves.

The airwaves are vital to companies like AT&T, Verizon and Sprint as more and more Smartphone users watch YouTube and Netflix and download music.

And the companies are willing to pay top dollar to snatch up the much-needed spectrum being sold by the FCC — six blocks of airwaves in total. The sale marks the first offering of airwaves since 2008.

It is thought the bids will continue to grow because the auction could go on for days or even weeks.

A bigger auction of wireless airwaves has been set for 2016. Although the date was originally planned for mid-2015, the deadline has been pushed back as the FCC works to get television stations onboard.

In a handout to broadcasters, the FCC said local TV stations stand to make tens or even hundreds of millions of dollars by selling their airwaves to large mobile companies through the auction. In fact, stations can earn as much as $570 million, according to the document.

First, broadcasters would bid to sell their airwaves and then wireless companies would bid to buy.

So far, owners of the TV stations have been less than thrilled with the idea because they are unsure of the risks involved, even though the FCC is predicting an overall $45-billion haul.

Broadcasters, the FCC said, can use portions of their earnings to increase their operations and move to new spaces on the spectrum.

 

 

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