Desperate for More Airwaves, Cell Carriers Spend $45 Billion

The massive windfall from a wireless auction will help lower the federal debt.

A view of cellular communication towers on March 6, 2014 in Emeryville, California. The U.S. Labor Department is asking mobile phone providers to increase safety training for crews who perform work on cell tower sites in the United States. According to the Occupational Safety and Health Administration (OSHA), more tower site workers died in 2013 than in the previous two years combined and four workers have died in the first weeks of 2014.
National Journal
Brendan Sasso
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Brendan Sasso
Jan. 29, 2015, 9:09 a.m.

Cel­lu­lar car­ri­ers spent nearly $45 bil­lion in an auc­tion of wire­less fre­quen­cies, blow­ing past even the highest es­tim­ates, the Fed­er­al Com­mu­nic­a­tions Com­mis­sion an­nounced Thursday.

The as­tro­nom­ic­al fig­ure shows just how des­per­ate car­ri­ers such as AT&T, Ve­r­i­zon, and T-Mo­bile are for ac­cess to more air­waves to power their cus­tom­ers’ devices. The ad­di­tion­al band­width will help their cus­tom­ers stream high-qual­ity videos and down­load apps more quickly. Without suf­fi­cient air­waves, also called spec­trum, wire­less net­works can be­come con­ges­ted and slow.

The auc­tion, which many had pre­dicted would raise at most $18 bil­lion, is of­fi­cially the largest in U.S. his­tory. The FCC has yet to an­nounce the win­ners of the auc­tion. 

The U.S. gov­ern­ment plans to use about $7 bil­lion of the rev­en­ue to build a na­tion­wide high-speed com­mu­nic­a­tions net­work for fire­fight­ers and po­lice of­ficers. The rest will go to pay­ing down the fed­er­al debt.

“Now, an ad­di­tion­al 65 mega­hertz of spec­trum is avail­able to im­prove wire­less con­nectiv­ity across the coun­try and ac­cel­er­ate the mo­bile re­volu­tion that is driv­ing eco­nom­ic growth and im­prov­ing the lives of the Amer­ic­an people,” FCC Chair­man Tom Wheel­er said in a state­ment.

CTIA, the lob­by­ing group for the wire­less car­ri­ers, said the auc­tion is only a “first step” and that poli­cy­makers need to do more to en­sure that car­ri­ers have ac­cess to enough spec­trum to meet the skyrock­et­ing de­mands of their cus­tom­ers.

Al­though the ad­di­tion­al spec­trum will im­prove wire­less net­works, stock shares for the ma­jor car­ri­ers have slipped in re­cent weeks as the auc­tion fig­ure con­tin­ued to climb up­ward. Few ex­pec­ted how much the car­ri­ers would have to spend in the auc­tion. 

The sur­pris­ing fig­ure is also a sign that the car­ri­ers will shell out even more money for a much lar­ger auc­tion set for 2016. In that auc­tion, TV sta­tions will sell off their li­censes to the wire­less in­dustry.

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