FCC's 25MHz auction plan tests the $19.6 billion SpaceX paid for satellite-phone airwaves

SpaceX paid EchoStar $19.6 billion for 65MHz of spectrum through two deals announced last year, according to Reuters in a report carried by CNA ^[3]. That works out to about $302 million a megahertz ^[18]. At the same rate, the 25MHz on the FCC's agenda would fetch about $7.5 billion ^[19]. Treat that as a reference point only. The FCC did not say which band the 25MHz comes from, when bidding would open or who may bid ^[1].

SpaceX can start without the auction. The commission approved its plan to use the EchoStar airwaves for direct-to-device service late Tuesday ^[5]. "This constellation will use the spectrum SpaceX purchased from EchoStar earlier this year, which the FCC approved in a major win for the American space economy," the FCC said in its release ^[9]. Amazon also bought its way in. In July it asked the FCC to approve up to 5,105 satellites for direct-to-device service, about a third of SpaceX's 15,000 ^[11][20]. In August it agreed to buy Globalstar for more than $11.5 billion ^[10]. Between them the two companies have committed more than $31 billion to deals outside any auction ^[17].

CNBC wrote that the proposals could benefit SpaceX and Amazon ^[8]. On timing I think that holds: both have already spent or committed billions, and the auction has no date. The same package would also consider rule changes to allow more flexible deals combining terrestrial and satellite networks, according to the Reuters account ^[6]. That gives AT&T, T-Mobile and Verizon a route in. Their joint venture for satellite-enabled coverage named Paul Roth interim chief executive last week ^[13]. They have reason to move. SpaceX's August plans could eventually put Starlink up against all three carriers, and those plans rattled wireless investors ^[14].

A clearing price near $302 million a megahertz would make SpaceX's private deal look fairly priced and give Amazon reason to bid. Well below that, and SpaceX paid a premium to avoid waiting on the FCC's schedule. The head-start reading is wrong if the carriers' venture wins the 25MHz, because the incumbents would then hold dedicated satellite spectrum of their own.

The 482MHz block is about 19 times the auction quantity ^[16], but the Oct. 29 vote only opens it to public comment ^[2]. FCC Chairman Brendan Carr said last month that wireless auctions over the next couple of years could raise more than $100 billion ^[15]. On the satellite rules he spoke more narrowly. "The 'direct-to-device' proposals work to continue leveraging this cutting-edge tech to end cell phone dead zones and provide service directly from next-gen satellite constellations to your smartphone," Carr said ^[7].

The two accounts differ on SpaceX's satellite count. CNBC reported that the FCC's Space Bureau on Tuesday granted an application for a new SpaceX direct-to-cell system of 15,000 satellites ^[4]. The Reuters account dates the 15,000 total to a January approval of 7,500 more second-generation Starlink satellites ^[12].