Airwave auction cracks $40 billion

A federal auction of licenses to the nation’s airwaves has brought in more than $40 billion and is continuting to climb.

The eye-popping figure surpassed all but the wildest estimates about the Federal Communications Commission’s (FCC) auction, and shows how much wireless companies value access to the nation’s spectrum. 

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The head of the Telecommunications Industry Association called the nation’s largest ever spectrum sell-off a “historic event.”

The high demand shows that the spectrum “crunch” — or scarcity — “is very real and that more work is needed to keep pace with exploding consumer demand for mobile broadband,” association chief executive Scott Belcher said in a statement.

Cellphone companies say that they need more and more access to spectrum to keep up with subscribers’ demands for faster data to watch videos, download apps and play games on their phones and tablets. 

As of mid-day on Thursday, companies had pledged more than $41 billion for access to the “AWS-3” airwaves, which were formerly used by government officials at the Defense Department and elsewhere.

The auction will end whenever bids run out.

The identities of the bidders remain secret until the auction closes, but wireless giants such as AT&T and Verizon are expected to be major participants, as is satellite TV company Dish Network.

Government profits from the current auction will go to fund a nationwide communications system for first responders, support next-generation 911 networks and pay down the federal deficit. 

In addition to the current auction, the FCC is also preparing a massive and more complicated auction for 2016, which will redistribute airwave licenses from broadcast TV companies to wireless firms.