600-MHz Spectrum Auction has Hit $10.6 Billion; Far Short of $86 Billion Needed to Clear All Spectrum Available

As many had suggested would be the case, demand for 600-MHz spectrum is falling short of expectations. In round 10, bids total about $10.6 billion.

Those bids are for 100 megahertz of 600-MHz spectrum assets up for grabs as part of incentive auction.

That amount is still well short of the roughly $86 billion expected to be needed in order to meet the current financial demand for that spectrum from television broadcasters.

There are lots of reasons why bidding so far has been less robust than expected. The reverse auction process itself encourages potential sellers to set high prices. Sprint is not bidding and T-Mobile US likely is concentrating on bidding for the reserve spectrum barred to AT&T and Verizon.

Overall, that means less price competition than would have occurred in earlier spectrum auctions.

There are other reasons, however. A fair amount of spectrum held by Dish Network might become available, if Dish concludes it cannot afford to build a mobile network using that spectrum, and sells it. Sprint still has lots of unused spectrum.

Some potential new bidders might be holding out for spectrum they can acquire simply by buying T-Mobile US or Sprint.

Brand new spectrum available on a shared basis is coming at 3.5 GHz. And the FCC has announced it will make available 29 GHz of new communications spectrum, including 7 GHz of unlicensed spectrum.

All of that represents a range of options for acquiring spectrum to support communications businesses. Not all models might require acquiring 600-MHz spectrum.