The U.S. Federal Communications Commission (FCC) has set the opening bids for major spectrum auction that will take place in early 2016. The total proceeds of the auction may reach as high as $80 billion.
The auction of the new spectrum is designed to bring TV stations in a process, which will ultimately clear latest airwaves for wireless networks.
The bidding prices will range from about $100 million in small markets, but may reach as high as $900 million in some markets such as the New York City. The FCC will be using a reverse auction, which is designed for letting the government pay the least amount for the needed participation.
"To participate in the reverse auction, a full power or Class A broadcast television licensee must file an application during the filing window specified in the Auction 1000 Application Procedures PN. The filing window for the reverse auction will open at noon ET on December 1, 2015," per an FCC press release.
Wireless operators in the U.S. who are willing to purchase frequencies will be allowed to participate in the auction. Airwaves of TV stations are attractive to wireless companies at they have the ability to transmit wireless signals deep in urban areas such as building and also over a long distance.
The upcoming auction will be the biggest auction of airwaves ever in the agency's history. The auctions were originally scheduled to be conducted in 2015 but it was delayed.
The FCC indicates that the upcoming auction is a good opportunity for broadcasters to take full advantage of their licenses, but it may also result in some stations going off air. The list of stations is quite big and includes over 2,000 stations. Experts believe that the auction proceeds may exceed $60 billion to $80 billion.
While the auction will be the biggest, some players such as Sprint will not participate in it. AT&T completed the acquisition of DirecTV in July this year that cost the company $49 billion. The operator also spent $5 billion to purchase Nextel and Iusacell of Mexico in early 2015, which means that the company may not want to spend billions in the next spectrum auction.
Similarly, Verizon has also spent about $130 billion this year to purchase Vodafone's share of Verizon Wireless, which leaves T-Mobile as a competitive bidder in the auction.
Broadcasters will have to take a decision if they want to participate in the auction by Dec. 1 this year and those interested must submit the applications by Jan. 28, 2016.
