The Federal Communications Commission has set Jan. 14 as the day it plans to begin auctioning off 10 megahertz of spectrum in the upper 1.9 GHz band, also known as the H-Block.
Licenses involved in Auction 96 will be offered up on an “Economic Areas” basis, which means there will be 176 licenses up for bid. A similar break out of licenses was used for the A- and E-Block licenses during the 700 MHz auction in 2008. H-Block license winners will also be required to meet build out requirements of 40% population coverage within four years and 70% coverage within 10 years.
The spectrum was part of Dish Network’s spectrum holdings prior to the FCC allowing Dish to use some of its spectrum in the 2 GHz band initially set aside for satellite services for a terrestrial network. In allowing Dish to use that spectrum for the terrestrial network, it was forced to give up 10 megahertz of its 40 megahertz total back to the FCC. Dish is under the gun to build out the 30 megahertz of spectrum it now controls covering 40% of the population in those markets within four years and 70% of the market within 10 years.
Sprint, which had a hand in freeing up the 10 megahertz of spectrum citing possible interference issues with its adjacent G-Block license, is seen by many analysts as the most likely to bid aggressively for the spectrum. The carrier is currently using its 10 megahertz of G-Block spectrum to support its LTE network, and would likely want to add the additional 10 megahertz to bolster that offering.
Dish could also be a player as the company filed a waiver request with the FCC stating it would bid at least 50 cents per megahertz per potential customer covered for the licenses, looking to put in at least a minimum bidding requirement. Dish has in recent months aggressively targeted various entities in the commercial mobile space, including failed attempts to acquire Clearwire and Sprint, as well as a current attempt to pick up bankrupt license holder LightSquared.
“[N]ews regarding Dish’s expected involvement in this auction may make this bidding more competitive than originally thought,” noted Wells Fargo Securities senior analyst Jennifer Fritzsche in a recent report.
Other bidders expected to show interest include most that have spectrum in the 1.9 GHz band that could easily be connected to the H-Block. While Sprint is currently relying exclusively on its 1.9 GHz spectrum for its LTE service, Verizon Wireless and AT&T Mobility are using their 1.9 GHz spectrum to support 3G services. Verizon Wireless has said it would look to at some point begin transitioning its 1.9 GHz spectrum holdings to support its LTE network build.
T-Mobile US is relying on its 1.7/2.1 GHz spectrum licenses for its LTE build, while its 1.9 GHz licenses are set to continue supporting 2G and 3G services, which means it could have less of an interest in the H-Block. T-Mobile US is likely to have more interest in the AWS-3 spectrum licenses that are adjacent to its 2.1 GHz spectrum holdings, which the FCC has been attempting to auction for several years. The Department of Defense recently announced it would be willing to free up spectrum in the 1.7 GHz band that could then be paired with the 2.1 GHz AWS-3 spectrum to provide up to 50 megahertz of paired spectrum for auction.
Regional carriers could also show interest in the H-Block as like Sprint a number of carriers have begun rolling out LTE services in their 1.9 GHz spectrum holdings, and could be looking to bolster those deployments.
The H-Block auction is also set to begin the same day that Industry Canada is to begin its 700 MHz auction, originally scheduled for Nov. 19.
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