U.S. wireless spectrum auction raises record $44.9 billion

WASHINGTON (Reuters) - The U.S. Federal Communications Commission raised a record $44.9 billion in the auction of so-called AWS-3 airwaves that closed on Thursday, marking the highest point yet in the wireless industry’s appetite for more spectrum.

Wireless carriers Verizon Communications Inc, AT&T Inc and T-Mobile US Inc, satellite TV provider Dish Network Corp and others vied for new slices of airwaves to satisfy the growing consumer demand for streaming video and other data-guzzling applications.

Regulators will disclose the winners of the auctioned spectrum licenses in the coming days.

The auction presented the largest opportunity for companies to buy new wireless spectrum since 2008. But it shattered the expectations of analysts and the FCC, barreling past the reserve price of $10.1 billion in the first week of bidding and more than doubling the haul of the biggest previous auction.

“By their actions, wireless carriers have demonstrated the importance of new spectrum,” FCC Chairman Tom Wheeler told reporters on Thursday as he received congratulations from lawmakers and industry executives.

The proceeds will pay for a new $7 billion public safety network and boost the Treasury’s coffers. Wheeler cited one forecast that the new spectrum might boost U.S. GDP by billions and add tens of thousands of new jobs.

The auction will also be important to Dish, which already owns similar airwaves whose value will now be crystallized for the first time. Its shares had hit an all-time peak during the course of the auction and rose 3.1 percent to $73.75 on Thursday afternoon.

The FCC now looks to 2016, when it plans to hold its largest and most complex auction yet of the low-frequency airwaves which are highly coveted for their strength and reach. Sprint Corp, which sat out the AWS-3 auction, is expected to join other bidders in that planned auction.

Investors have worried that AT&T and Verizon may have overspent in the AWS-3 auction, but analysts argue that more spectrum will help carriers expand their network capacity as they tackle intense competition in the near saturated wireless market.

Based on their debt-raising patterns, AT&T may have purchased more than Verizon, said Jonathan Chaplin, an analyst at New Street Research. He expects AT&T to pay between $20 billion to $22 billion and Verizon to spend in the range of $14 billion to $16 billion in the auction.

Canada’s government plans to auction off similar AWS-3 airwaves in March.

Reporting by Alina Selyukh in Washington and Malathi Nayak in San Francisco; Editing by G Crosse and Paul Simao