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Verizon Is the Top Bidder on 5G Spectrum, Committing More Than $45 Billion

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  • The Federal Communications Commission announced the winners of an $81 billion auction for the license to use important airwaves that are ideal for 5G.
  • The big winners were Verizon and AT&T. They need these airwaves in order to build 5G networks, which are significantly faster than current wireless service.
  • Verizon, through its Cellco Partnership, spent nearly $45.5 billion on the airwaves. AT&T, through AT&T Spectrum Frontiers, spent $23.4 billion.

On Wednesday, the Federal Communications Commission announced the winners of an $81 billion auction for the license to use important airwaves that are ideal for 5G.

The big winners were Verizon and AT&T. They need these airwaves in order to build 5G networks, which are significantly faster than current wireless service.

Verizon, through its Cellco Partnership subsidiary, bid nearly $45.5 billion on the airwaves. AT&T, through AT&T Spectrum Frontiers, bid $23.4 billion. The third-largest U.S. carrier, T-Mobile, bid the third-largest amount of money, $9.3 billion.

The sums spent by the companies ended up much higher than expectations for the auction last summer, which reflects how important securing licenses for the airwaves is for the carriers.

"These record-breaking results highlight the demand and critical need for more licensed mid-band spectrum and demonstrate the importance of developing a robust spectrum auction pipeline," said CTIA CEO Meredith Baker in a statement. CTIA is a trade group that represents the wireless industry. Bidders are still under a quiet period, when they are not permitted to publicly comment.

The 280 megahertz of spectrum up for grabs in this auction is midband spectrum, sometimes called the "goldilocks band," which means that it's well-suited for 5G networks, combining the ability to transmit huge amounts of data with a wavelength that can travel long distances.

The results are in line with previous industry expectations. Verizon and AT&T were expected to be the biggest bidders, because they did not have a lot of midband spectrum. T-Mobile had already acquired some midband through its merger with Sprint.

Not all the spectrum was sold at once. The 280 MHz of spectrum was split into smaller 20 MHz blocks and further divided into 406 geographic regions. All together, there were 5,684 licenses up for grabs.

In total, the three biggest U.S. carriers won 90% of the licenses up for auction.

Here are the top five bidders, according to the FCC:

  • Cellco Partnership: $45,454,843,197
  • AT&T Spectrum Frontiers LLC: $23,406,860,839
  • T-Mobile License LLC: $9,336,125,147
  • United States Cellular Corporation :$1,282,641,542
  • NewLevel II, L.P.: $1,277,395,688

The top five bidders by number of licenses granted were:

  • Cellco Partnership: 3,511
  • AT&T Spectrum Frontiers LLC: 1,621
  • United States Cellular Corp.: 254
  • T-Mobile License LLC: 142
  • Canopy Spectrum, LLC: 84

U.S. Cellular is the fourth-largest U.S. carrier. NewLevel II represents private equity firm Grain Management, while Canopy Spectrum is a venture between former Wells Fargo analyst Jennifer Fritzsche and investor Edward Moise Jr., according to LightReading.

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