Home Business Government airwaves auction reaches $34 billion

Government airwaves auction reaches $34 billion

Everyone knew that when the government first elected to auction off airwaves for use in mobile broadband, the bids were going to be high. However, nobody estimated just how high they would be.

The New York Times reports that select companies have already bid more than 34 million dollars for use of the airspace. This number goes greatly beyond presale estimates, and marks the largest auction in the history of the Federal Communications Commission. The bidding is for six blocks (65 megahertz) of airspace that is being sold by the F.C.C. The current bidding, which is still going on, is almost three times higher than originally estimated 10.5 billion dollar reserve. This shows the amount of interest in unused space, as well as the estimation that cellphone use will only become more and more popular as the years go on.

The auction’s high price tag can be attributed to several factors. Of these is the coinciding between the years that have passed without an auction and the popularity of mobile devices. Both of these factors lined up in such a way that this auctioned space has become very appealing to companies. However, even so, the high numbers are surprising as the airwaves being auctioned have a high frequency, something that is usually less attractive for wireless use. Still, this is a big stride forward for the F.C.C, who plan to use seven billion dollars of the auction money to finance FirstNet, a new building of a nationwide public-safety communications network. The rest of the money will go directly to the Treasury.

The last big auction for airspace took place back in 2008, when the Iphone was just a year old. Now that phone use has exploded, airspace is a hot commodity. Seven different companies were given rights to bid in the auction, but the winner of the auction will remain a secret until the dealings are done. These companies include such big names as Verizon and AT&T. While only one company will be able to garner the rights, this opening of airspace has had many requesting Congress for more auctions in the near future.