The Federal Communications Commission’s auction of H-block spectrum ended yesterday after bids reached the US$1.564bn reserve price.
Satellite broadcaster Dish Network is widely expected to have won the majority of the licences in the tender, which…
The Federal Communications Commission’s auction of H-block spectrum ended yesterday after bids reached the US$1.564bn reserve price.
Satellite broadcaster Dish Network is widely expected to have won the majority of the licences in the tender, which closed after 167 rounds of bids since the process began on 22 January.
Dish was the only major player which registered to take part in the auction for 10 MHz blocks of paired airwaves on the 1915 MHz to 1920 MHz bands and the 1995 MHz to 2000 MHz bands.
The details of the winners and the prices they paid are expected to be released in the next week.
Tim Farrar, principal of TMF Associates, commented in a blog post: “It’s clear that Dish won virtually all of the licences, since it was able to select a sequence of bids to exactly match the reserve price.”
The H-block licences are complimentary to Dish’s existing holdings as it owns a significant amount of spectrum between the neighbouring 2000 MHz and 2200 MHz bands.
BTIG Research analyst Walter Piecyk suggested that the result of the tender was something of a foregone conclusion.
“The closing price is pretty strong evidence that this was more of a negotiated deal with the FCC, rather than an auction,” he said in a note.
Piecyk estimated that the win increased Dish’s aggregate spectrum holdings by 24%. The company, majority owned and led by industry veteran Charlie Ergen, had also made a bid to acquire LightSquared’s L-band spectrum in the wireless broadband company’s bankruptcy process, but walked away in January.
Farrar said that now the question is what Dish does with its airwaves. The DTH giant has been amassing spectrum for some time but is yet to build out a network and is keeping its options open.
In the past it has talked about partnering with a wireless operator, specifically T-Mobile US, but the German-owned carrier is widely reported to be a target for Sprint Corp. Ergen may look to play some part in a potential Sprint/T-Mobile merger, and the H-block acquisition would strengthened his hand in this scenario.
Dish could look to link up with the mobile operators, or it may oppose an attempt by Sprint to acquire T-Mobile – a deal would likely attract intense regulatory scrutiny – and look to subsequently scoop up T-Mobile at a lower price, Farrar suggested.
However, Farrar only gave a Sprint/Dish tie-up a 30% chance of happening, whereas he considered a bid from Ergen for LightSquared in the coming weeks highly likely.
