T-Mobile US received approval from the Federal Communications Commission (FCC) to offload its 800 MHz spectrum to investment firm Grain Management, with possible spoils for the direct-to-device (D2D) market.

As reported by Light Reading, T-Mobile US will transfer its 800 MHz licenses to the firm in exchange for $2.9 billion in cash and also Grain's 600 MHz licenses to bolster T-Mobile US' low-band coverage layer.

The deal brings to an end T-Mobile US' long running efforts to shed the 800 MHz estate it acquired through its $26 billion purchase of Sprint in 2020. That deal was allowed to go through by regulators on the condition Dish Network ingested Sprint's Boost prepaid wireless business plus its 800 MHz spectrum assets in a bid to make Dish the fourth major U.S. carrier.

Dish eventually backed out of the spectrum purchase due to a lack of funding, leading the assets to go to auction in 2024.

Eventually T-Mobile US struck a deal with Grain in March of last year. The FCC again had conditions in that Grain was not allowed to hoard its new assets, which include spectrum in the 817 MHz–824 MHz band paired with the 862 MHz–869 MHz band.

D2D dreams

In its most recent order released this month, the FCC also rejected Grain's clamor for a long-range buildout for the ecosystem to support the band, specifically with an extension of the 2028 expiry affecting many of the 800 MHz licenses.

Grain was granted three years for its interim buildout and eight years for the final buildout. The investment unit is banking on D2D services to justify its acquisition, with a waiver from March of this year requesting to authorize the use of the 800 MHz spectrum for D2D operations.

The FCC expects Grain "to bring more intensive use of spectrum" to the U.S. market, including through D2D.

"We also provide incentives for Grain to partner with D2D operators in the near term. Specifically, we tie Grain’s completion of a transparent competitive solicitation process and submission of complete D2D applications before the end of 2026 with the application of clearly defined, achievable D2D performance requirements for this 800 MHz spectrum," the FCC said, adding: "we will consider D2D applications associated with these 800 MHz licenses even if Grain completes its solicitation and files application after 2026, but we will not guarantee the certainty of the clearly defined, achievable performance metrics that otherwise would have applied."

One of these potential partners is AST SpaceMobile, with the satellite operator welcoming the deal in an filing sent to the FCC. That filing claimed it has 10 satellites in operation that are capable of operating in the 800 MHz frequency band, and that it's planning to soon file an experimental application to test this spectrum usage.

While Grain and satellite operators may find a boon in the approval, T-Mobile US probably has the most to celebrate with its 600MHz spectrum acquisition "likely to result in greater capacity, speed, and reliability for its customers," according to the FCC.

The FCC also plans to auction 160-megahertz of spectrum in the upper C-Band (3.7 GHz) next year with a strictly terrestrial remit. The FCC also concluded its AWS-3 (1.7/2.1 GHz) spectrum auction in June, with total winning bids exceeding $3.5 billion.

The FCC stated that up to $3.3 billion of those spoils would be partly used to cover amounts borrowed to support its “rip-and-replace” program for the removal of Chinese telecom kits from U.S networks.