(Bloomberg) -- A US government auction of mainly rural airwaves suitable for advanced 5G wireless service began Friday, giving T-Mobile US Inc. a chance to fill in its patchwork holdings of the frequencies.
The frequencies being offered were once reserved for schools, and T-Mobile holds leases from many institutions already. The new auction involves rights to areas never assigned to a school, and between existing licenses.
T-Mobile is the largest operator in the airwaves being sold, and is likely to be the auction winner, analysts Jonathan Chaplin and Philip Burnett of New Street Research said in a July 27 note.
“We expect this auction to underwhelm on price,” Chaplin and Burnett said. “None of the other national carriers would want to get stuck with these licenses.”
The sale is being conducted by the Federal Communications Commission through electronic bidding, and could continue for weeks. The airwaves being sold are in the 2.5 gigahertz band.
The auction is the most recent in a series by the FCC to offer so-called mid-band airwaves, considered useful for wireless service, including 5G, because they travel far and can carry a lot of data.
“We all know there are gaps in 5G coverage, especially in rural America, and this auction is a unique opportunity to fill them in,” FCC Chairwoman Jessica Rosenworcel said in a news release Friday.
The auction’s start is “a watershed day” for wireless innovators and consumers, said former FCC Chairman Ajit Pai, who proposed the sale while he led the agency in 2018.
The sale may lead to rural consumers benefiting from applications such as telehealth and using wireless data to improve crop yields, Pai said in an interview with Bloomberg Television’s “Balance of Power With David Westin” on Friday.
“These are glimpses of the future that we’re seeing now, and this mid-band spectrum auction could help make it become a reality,” said Pai, now a partner at the investment firm Searchlight Capital Partners.
FCC anti-collusion rules generally preclude companies from commenting until auction results are final. T-Mobile didn’t immediately respond to an emailed query Friday.
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Author: Todd Shields