In one of the least suspenseful airwaves auctions ever, the Federal Communications Commission announced Thursday that bidding for licenses sought by Charlie Ergen’s Dish Network sold for the auction’s minimum price of $1.56 billion.
It wasn’t the worst auction the FCC has conducted in recent memory (that honor goes to the D Block auction of 2008, when no one bid enough to win). But it certainly isn’t the best outcome for government officials hoping to attract the most revenue possible for the airwaves. Proceeds from the auction are set to go toward funding a new mobile network for police and other first responders.
Dish is the presumed winner of the airwaves licenses, according to industry analysts who’ve been watching the bidding. The FCC wouldn’t release the name(s) of the winner(s) and said it would take a few days to compile the official results. A Dish spokesman declined to comment, citing anti-collusion rules.
“With this successful auction, the Commission makes good on its commitment to unleash more spectrum for consumers and businesses, delivering a significant down payment towards funding the nationwide interoperable public safety network,” FCC Chairman Tom Wheeler said in a statement. “We also commend everyone who worked so hard to resolve technical issues that made this previously unusable spectrum valuable.”
The feds auctioned off a 10 megahertz chunk of airwaves known as the H Block. It’s the first major auction the FCC has held since 2008 but it’s planning a few more, most notably a complicated two-sided auction of TV airwaves next year, dubbed the “incentive auction” since some of the proceeds will go to broadcasters that give up licenses.
As my colleague Ina Fried noted last fall, at least one FCC commissioner, Democrat Jessica Rosenworcel, had pushed to pair the H Block airwaves with another chunk of spectrum to make it more attractive to more bidders (and, hence, drive up the price).
Wall Street analysts warned that the H Block airwaves wouldn’t be that attractive because the agency was auctioning off such a small chunk of licenses. Even some of the wireless carriers told the agency that pairing those airwaves with another band would make them more likely to bid.
A majority of FCC officials chose to move ahead with auctioning off the H Block by itself anyway. Other wireless carriers opted against bidding for the airwaves in favor of holding onto their cash for another upcoming auction of a larger swath of airwaves.
The agency set a minimum price of $1.564 billion (which is what Ergen promised to bid for the licenses in exchange for getting a related waiver he also needed) but that was supposed to be the floor, not the ceiling. Dish ended up being the only deep-pocketed company interested in the licenses and presumably ended up paying the reserve price.
The airwaves are attractive to Dish because they’re adjacent to another chunk of licenses already held by the company. That would make it easier for Dish to either deploy its own broadband wireless network or flip the licenses and sell them to another wireless carrier.