The Federal Communications Commission's 600-megahertz airwave spectrum auction, which started yesterday and should run til September, gives Big Media "one of the last chances to secure low-band broadband spectrum for long-distance and in-building Internet service" -- and first-day action has already been "dramatically altering the supply/demand outlook" and "leveling out the playing field as we enter into a 5G world," writes analyst Amy Yong at Macquarie Securities.
She says the auction should raise nearly $40 billion, down from early estimates of up to $60 billion:
"AT&T and Verizon each have a ~$10bn budget
"T-Mobile has earmarked ~$8bn but is expected to spend significantly less
"Comcast is expected to spend US$5-7bn, based on our survey of institutional investors;
"Dish could spend US$3-4bn based on its leverage...
"Notably, not on the list of completed applications released May 12th were Liberty Global and Google, which are no longer expected to participate."
New York, Los Angeles and Chicago spectrum should generate premium prices. "To increase competition, the FCC will set aside ~30MHz of spectrum in each region for smaller players. This includes T-Mobile, Dish and Comcast." It could be years before the new spectrum is in use.