Americans Win With Successful 600 MHz Auction
Thanks to the Incentive Auction, mobile providers will soon have access to 70 MHz of new mobile broadband spectrum to meet America’s growing mobile needs. More spectrum is crucial as demand for wireless data is surging. Eight out of 10 Americans say mobile is indispensable to their lives today, and we have over 380 million wireless connections in the U.S. That’s more wireless devices than people. Wireless use more than doubled in 2015 alone, and it’s expected to grow six times those levels by 2020. Ultimately this 70 MHz of new spectrum -- along with additional future bands -- will help the wireless industry meet that demand and ensure the U.S. remains the global wireless leader.
Billions More Invested. The U.S. wireless industry now has spent over $100 billion in spectrum auctions. This is on top of more than $300 billion U.S. wireless providers have invested in networks in just the past 10 years. The wireless industry invests in America, and we will spend billions more now to deploy this new spectrum. This auction raised $19.6 billion making it the second largest auction ever. It also provides the wireless industry more spectrum than the AWS-3 auction did two years ago. It’s rare for a single auction to include this much spectrum, and the final auction results are in line with the major Wall Street projections—J.P. Morgan, Wells Fargo and Morgan Stanley all projected that the auction would add approximately 70 MHz of spectrum for mobile broadband.
New Jobs and Billions More to the Economy. Introducing more spectrum into the mobile space is a proven multiplier for our economy and workforce. Recon Analytics found an auction of this size (70 MHz of new spectrum) will result in more than $2 billion in new growth to our economy and more than 70,000 new jobs. There are very few actions the government can take to jumpstart such dramatic private-led economic growth.
In addition, the auction will generate approximately $7.6 billion that will go directly to the U.S. Treasury. Finally, this auction also allowed the FCC to set aside an additional 14 MHz of spectrum for unlicensed uses like Wi-Fi and LTE-U/LAA.
600 MHz and 5G. Just as the 700 MHz auction in 2008 was critical to the deployment of 4G services across the country, the 600 MHz band will be important for the next generation of 5G wireless services. A recent report by Accenture found that 5G will lead directly to millions more new jobs, add billions to our economy and fuel new applications and services that will make our lives safer and better. Notably, 80 percent of small businesses believe 5G will be important to their business. And studies show 5G will revolutionize industries, driving trillions in benefits and savings and deliver tens of billions in smart city benefits to communities across the country.
Timely Access to the Spectrum. The wireless industry supports a seamless repacking process for our broadcast partners, and we are committed to working collaboratively with broadcasters to achieve the 39-month transition that Congress enacted. It should be noted we are asking wireless operators to wait a year and a half longer than in previous auctions to access spectrum. Indeed, wireless carriers started using 700 MHz spectrum 21 months after the 2008 auction. Similarly, providers started using AWS-3 spectrum 21 months after that auction. Imagine buying a new house or business but not being able to access or use it until 2020. More than three years is an eternity to the wireless industry, and we all need to work together to meet the post-auction schedule, as any delays in access to 600 MHz spectrum risks delaying 5G services and the accompanying economic benefits.
Scheduling the Next Auction. While we can—and should—celebrate that the United States successfully held the first two-sided incentive auction in the world, there is much more to be done to keep up with America’s growing mobile needs. It takes 13 years on average to bring spectrum to consumers, but after successful auctions in 2015 and just now, there is no future auction scheduled. Congress and the new Administration need to help identify the next bands to auction now. Creating a regular pipeline to identify future spectrum will help maintain America’s role as the wireless leader.
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Congratulations to the winning broadcasters and wireless operators, and thank you to Congress and the FCC for designing and delivering on a historic auction that will create enormous benefits for mobile consumers across the country. We lead the world in wireless across so many metrics – and the incentive auction shows that we lead in the world in forward-thinking spectrum policy too.