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FCC Spectrum Auction Ending this Week… Merger and Acquisition Activity Expected in Full Swing

March 29, 2017 fcc, Industry News, Verizon, AT&T, merger, spectrum, Sprint, T-mobile, auction, Charter Communications, Time Warner, Trump
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What does this mean for wireless lease land owners?

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The latest FCC spectrum auction, also known as the Broadcast Incentive Auction, is the FCC’s latest effort to meet the ever-increasing demand for wireless services. The auction is repurposing spectrum by encouraging broadcasters to voluntarily release their spectrum rights for wireless use in exchange for a share of the auction proceeds. The auction started last year on March 29 and is finally expected to come to an end on March 30, 2017.

During the spectrum auction, wireless carriers have to follow the FCC’s anti-collusion rules. This mandatory “quiet period” prohibits any communication between wireless carriers that could influence bidding in the auction. The rule is in effect “until the results of the incentive auction are announced by public notice.” With the presidential election of Trump occurring during the middle of the auction, carriers have not been able to take advantage of the merger-friendly administration. As a result, many analysts believe M&A activity will be in full swing after the conclusion of the spectrum auction.

When the anti-collusion rules are lifted at the end of the auction on March 30th, carriers will be able to participate in talks among themselves and companies that want to break into the wireless market. The most notable possible mergers expected on the horizon are AT&T/Time Warner, Sprint/T-Mobile, and Verizon/Charter Communications.

1. AT&T/Time Warner: The $85 billion merger between AT&T and Time Warner is one of the first “vertical” mergers combing a wireless company with a content-rich business. The integration of Time Warner’s content with AT&T’s wireless service could change the future landscape of the wireless industry.

2. Sprint/T-Mobile: The potential merger of Sprint and T-Mobile has been the most widely rumored transaction. Sprint has attempted to merge with AT&T and T-Mobile in the past but was shut down due to a merger-unfriendly FCC. Now with a Republican administration in office, analysts believe it will be open to consolidation and give Sprint the opportunity to finally merge with T-Mobile.

3. Verizon/Charter Communications: Lastly, the possible merger of Verizon and Charter Communications could provide a real window of opportunity for the rollout of alternative technologies and decrease the carrier’s dependence on cell tower leases. Charter is rich with fiber and with the future deployment of 5G, Verizon is looking for a partnership that would give them a competitive advantage in the future.

Ultimately, the possibilities are endless when it comes to possible merger activity after the spectrum auction. Merger discussions have been a longtime coming since the yearlong auction and now with a Republican president being more open to consolidation, 2017 could be a year of change for the wireless industry. As a wireless lease land owner, it is imperative that you stay out in front of the changing times ahead so that you can achieve the highest and best use from your wireless assets. Unsure how these upcoming changes could affect your wireless lease? The wireless lease experts at TowerPoint Capital are ready to assist you.

Sources:
http://www.broadcastingcable.com/news/washington/fccs-spectrum-auction-finally-ending-week/164401
http://fortune.com/2017/02/10/fcc-wireless-television-mobile-auction/
http://www.spectrumgateway.com/600-mhz-spectrum
http://www.lexology.com/library/detail.aspx?g=60fb93ed-838e-453c-8b49-3d9e7e5300f6
http://www.fiercewireless.com/wireless/why-analysts-see-a-flurry-m-a-horizon-and-what-it-means


About TowerPoint Capital:

TowerPoint Capital is a leading institutional investor in and manager of wireless real estate across the United States. Since 2007, we have created long-term value for our landlord and corporate partners by emphasizing the company’s core values Knowledge, Professionalism, Integrity, Partnership. TowerPoint's leadership team possesses fifty years of combined experience, having invested in (or financed) over $1 billion in telecommunications infrastructure and real estate-related assets. TowerPoint is headquartered in Atlanta, GA with satellite offices around the US.