The U.S. Federal Communications Commission (FCC) has received more than $34 billion bids for its airwave auction of licenses for mobile broadband. The sudden surge of offer only proves that wireless companies are expecting high demands for Internet connection for the next few years.
The FCC, which expected only about $10.5 billion for the sale, didn't see it coming. Companies bid for six blocks of airwaves or 65 megahertz closed at $34 billion or three times of the estimated worth on Friday, according to the New York Times.
"It's stunning," said Preston Padden, executive director of the Expanding Opportunities for Broadcasters Coalition, to the New York Times. The coalition consists of a group of TV stations planning to sell their airwaves through a FCC auction for 2016.
"Consumer demand for wireless broadband is on a growth curve that looks like a hockey stick, and carriers are desperate to keep up with that demand," he added.
Even the analysts were surprised of the turnout as though they expected the sale to surpass the FCC's estimate but didn't anticipate it to be three times the original value.
"This is happening because spectrum is the critical raw material for wireless data capacity, and it's in short supply," said Jonathan Chaplin, telecom analyst at New Street Research, to the Wall Street Journal.
Consumers are expected to benefit from the sale as the highest bidders will get additional airwaves or spectrum which can make Internet connection faster. Companies needed to purchase additional spectrum as more consumers are watching YouTube videos, stream music, and share photos through their smartphones.
Some of the known bidders for the airwaves include AT&T, Verizon, T-Mobile US and Dish Network, which are all looking to expand even if they own almost half of the spectrum. The FCC has approved 70 companies so far and will reveal the higher bidders when the auction is completed.
