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Dish, AT&T, Verizon's mobile broadband bids slash US debt by 0.13%
YES! NOW WE'RE COOKING ON GAS!
AT&T was the biggest spender in the auction for wireless broadband frequencies that closed yesterday – spending $18.2bn to get access to every corner of the US.
Of the remaining $23.1bn spent by telcos, Dish Network was the unexpected second largest shopper with $13.3bn blown on spectrum licenses, followed by Verizon with $10.4bn. T-Mobile US spent just $1.8bn and Sprint did not bid at all. While AT&T's share price went up slightly, Dish Network's dropped several per cent.
AT&T heralded its huge spend on licenses saying that it has managed to achieve "near nationwide contiguous 10 x 10MHz block of high-quality AWS-3 spectrum," reaching 96 per cent of the US population. It will start using the spectrum in 2017-2018 as a "supplemental downlink" to expand its mobile network capacity and performance.
The Federal Communications Commission was cock-a-hoop over the final tally of $41.3bn for 1,611 licenses, producing an average license cost of $25.7m. That's slightly lower than the $44.9bn and 1,614 licenses announced on Thursday, suggesting there's been some last-minute adjustments.
The US regulator had set a baseline figure of $10.6bn in order to cover the cost of relocating or sharing the spectrum with the federal agencies that have had exclusive use of the bands up until now.
The shared frequencies up for sale were the 1695-1710MHz, 1755-1780MHz, and 2155-2180MHz bands.
The massive excess funds make it the US' largest ever spectrum auction. Of the remaining $30.7bn, $7bn of it will be use to create a nationwide broadband public safety network that will allow first responders nationwide to communicate with one another at all times and without delay. A small amount will be spent on research and grants, but the bulk will be handed over to the Treasury which says it will use it to pay off the national debt.
Before you get excited though, that $23.3bn is not going to make much of a dent, representing just 0.13 per cent of the United States' $18 trillion of national debt.
The largest sum for a single license was $2.8bn spent by AT&T on spectrum for New York's Long Island, closely followed by $2.1bn for a similar piece of prime spectrum in Los Angeles.
At the other end, a ridiculously low $2,800 was spend on the "A1" slot 1695-1700MHz for American Samoa. On the mainland, the cheapest piece of spectrum was for Johnson, Tennessee, costing just $8,600. The per-capita income for Johnson is just $20,364 and 16 per cent of the population live below the poverty line.
The bids were anonymous and all successful bidders are expected to put 20 per cent down by February 13 or lose their rights to their licenses. Final payments are due March 2.
The FCC handily provides its bank details on the announcement release. Make sure you title your transfer "AUCTIONPAY" or the US government may not know what your millions of dollars are supposed to cover. ®