While most analysts have remained vague concerning how much revenue these auctions would generate, a report issued July 29 by Brattle Group Principal Analyst Coleman Bazelon claims that the legislation’s proposal to auction 500 MHz of new commercial spectrum will likely generate approximately $64 billion in net revenue.

    Bazelon’s report evaluated each of the six auctions and found that the net return of each varies between $5 billion and $21 billion. As proposed, the auctions would collectively introduce 470 MHz of spectrum and generate approximately $100 billion, with a deduction of $6 billion for expected exclusion zones for reallocated federal spectrum.

    “Expected clearing costs of about $30 billion would result in net revenue of $64 billion,” Bazelon said in the report. “In the past, the FCC has been successful in designing auctions which garner close to the full value of the spectrum. Given that the draft legislation addresses many issues that influence spectrum value, resolving them in favor of higher valuations, it is likely that future well designed FCC spectrum auctions will generate receipts similar to the full value of spectrum.”

    During the past year, the U.S. National Broadband Plan (NBP) and the U.S. National Telecommunications and Information Administration (NTIA) have identified more than 2,000 MHz of radio spectrum as potential candidates for spectrum reallocation.

    Not all analysts are sure that the spectrum auctions can be evaluated with precision. An Analysys Mason report, issued July 27, asserted that operators now have a much wider range of options on spectrum, including: the IMT expansion band at 2.6GHz; re-farmed spectrum in the 850 MHz, 900 MHz and 1800MHz bands; and digital dividend spectrum.

    Analysys Mason Principal Analyst and Spectrum Research Program Director Terry Norman believes that these choices, along with spectrum capping at auctions and increasing network sharing between operators, have contributed to a more complicated decision-making process.

   “The value of spectrum has never been particularly easy to determine. It depends on many variables that can be described collectively as the technical, commercial and strategic factors,” Norman told Satellite TODAY Insider. “10 years ago, valuing spectrum was more straightforward, compared with today. A single lot of spectrum became available at a particular frequency and an operator estimated the value and knowing its budget entered into the auction. Furthermore, cognitive technologies designed to exploit white-space spectrum could make the notion that any user of spectrum has exclusive access to the spectrum redundant.”