FCC launches multi-billion dollar auction that will likely change the face of media

By Ted Goodman

The Federal Communications Commission (FCC) started its unprecedented wireless spectrum auction Tuesday.

The FCC is buying the spectrum rights of participating television stations in a “reverse auction” that started at 10 a.m. In the reverse auction, broadcasters will bid downward against each other to sell their spectrum rights to the FCC. It will then sell those rights to wireless providers in a “forward auction.” It’s addressing increasing consumer demands for mobile wireless connectivity by re-purposing broadcast television spectrum to wireless mobile services.

Most of our wireless communications from cell phones to Wi-Fi operate over the radio spectrum, a finite resource. This chart shows how the government (through the FCC) allocates our radio frequencies to different technologies. Broadcast television networks like NBC, CBS and ABC used to operate literally “over the air.” While broadcast stations still serve a purpose for millions of Americans who receive their television through antennas, most Americans watch television through cable, broadband and satellite. The auction is an attempt to meet increasing consumer demands for mobile wireless connectivity by re-purposing broadcast television spectrum to wireless mobile services.

AT&T, Verizon Wireless and T-Mobile USA will participate in the forward auction. AT&T and Verizon are by far the two largest players in the wireless communications market, and T-Mobile has filed petitions with the FCC to ensure smaller carriers can remain competitive.

Sprint is not participating in the auction, stating “Sprint has the spectrum it needs to deploy its network architecture of the future.” While Sprint may not participate, many others have applied to bid for the new wireless licenses, ranging from multi-billion dollar corporations to individuals.

Along with net neutrality and the Time Warner Cable/Charter merger, FCC Chairman Tom Wheeler’s lasting legacy may be determined by the success of the auction, which he dubbed a “Spectrum Extravaganza.” The FCC created a “dashboard” so the public can monitor the auction’s progress.

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