Why is the FCC Shelling Out $300M to Mobile Carriers?
It looks like Verizon (NYSE:VZ), AT&T (NYSE:T), and Sprint (NYSE:S) will be getting the expansion that they have been desperately seeking. The Federal Communications Commission is establishing a fund to encourage carriers to roll out 3G and 4G in remote pockets of the country where signals are sparse.
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The FCC announced that it plans to award up to $300 million to the mobile operators offering the lowest rates. The FCC will decide which carriers will receive the funds in a sealed, single-round auction that will open June 27 and close July 11.
The FCC requires carriers to cover at least 75 percent of the road miles within a given census tract as a condition of receiving the funds. The FCC has already indicated that Rocky Mountain states like Utah and Idaho, along with Maine, Appalachia and upstate New York, will be first in line for upgraded service. It is still unclear which mobile players are interested in the FCC’s new plan. Nevertheless, this is a perfect opportunity for Verizon and AT&T to gain more LTE customers in new markets.