Source: AT&T

Barring an unforeseen change, the coming FCC spectrum auction will likely be the most important story in the telecom industry in 2016, and it's just days away.

With mobile data usage soaring, scarce wireless spectrum has become the lifeblood of the wireless industry. Case in point, wireless carriers set a fresh record for spectrum costs when they paid a whopping $45 billion in the FCC's last major spectrum auction in early 2015.

Last week, the FCC released its list of the companies that have filed to participate in this year's auction. So without further ado, let's examine the companies to watch in the upcoming auction, and other key details investors should know regarding the looming FCC spectrum auction.

Who's in, who's out?
As should come as no surprise, major U.S. telecom carriers like AT&T (T -0.97%), Verizon Wireless (VZ -1.18%), and T-Mobile (TMUS -1.96%) all appear on the FCC's list of participants. Sprint's (S) name is nowhere to be found, but that shouldn't come as a surprise. The nation's fourth largest wireless carrier by subscribers previously stated that it plans to skip the auction in favor of concentrating on its current turnaround strategy. All told, the list of possible bidders totals 104 total applicants and extends well beyond the usual suspects.

The list can be somewhat difficult to parse because the FCC only requires an application to divulge its firm's or individual's legal name, which can easily obfuscate the actual backer for any given entity. However, some commendable background research from The Wall Street Journal uncovered a number of lesser-known, but noteworthy, entities in the FCC's auction participant database. Among them, Sinclair Broadcast Group, the largest owner of U.S. television stations, and Puerto Rico Telephone Company, which is owned by billionaire Carlos Slim's America Mobile SAB, have both filed to participate in the forthcoming auction. Also of note, an affiliate of John Malone-backed Liberty Global filed to partake in the bidding, though it reportedly no longer plans to do so. A holding company of former Facebook POSITION Chamath Palihapitiya's Social + Capital venture capital fund is also worth noting.

Source: T-Mobile

Rules of the road
The coming spectrum auction will occur in two phases. The first phase will involve current spectrum owners, mostly cable broadcaster with excess spectrum, engaging in a reverse auction to set the price at which broadcasters will sell their spectrum. The following forward auction will then determine the price at which wireless carriers like AT&T, Verizon, and T-Mobile will be willing to pay for the available spectrum.

Thanks in part to the spectrum it acquired in buying Leap Wireless in 2014, expanding AT&T's spectrum holdings aren't a top priority for the company; AT&T management has signaled it plans to participate in the auction to some extent. Like AT&T, Verizon Communication's spectrum needs are largely covered in the near-term, so it also won't likely be highly active in the coming spectrum auction. For context, AT&T and Verizon are estimated to together control as much as 73% of the low-band spectrum in the U.S. To further its dogged competition with AT&T and Verizon, T-Mobile is widely expected to make a concerted effort to cover its spectrum needs in the FCC auction. Last September, T-Mobile CFO Braxton Carter told attendees of an investor conference that the Un-Carrier could spend as much as $10 billion to address its low-band spectrum needs. So while only time will tell how actual events will unfold, telecom investors will certainly want to closely monitor the movements from AT&T, Verizon, T-Mobile, and more in the coming weeks.