C Band auction’s first phase wraps up at $80.92 billion
It’s perhaps fitting that the some of the last spectrum licenses at issue in the biggest dollar-figure spectrum auction that the U.S. government has ever held, were in a license area named for Franklin, NC, a little town of less than 4,000 people known locally as the Gem Capital of the World.
The 3.7 GHz auction has offered up treasure of another sort: Prized midband spectrum for carriers to deploy 5G, and nearly $80.92 billion in bids raised after 97 rounds. The Federal Communications Commission had bumped up the number of daily rounds and shortened them to 20 minutes each to chivvy the field of 57 bidders into settling the prices for the final licenses that were still seeing competition.
With the clock phase concluded and the supply of licenses matching demand at established prices, now the auction heads into an assignment phase, in which winning bidders will be able to bid for frequency-specific assignments within the blocks that they have won. The FCC said that it would release a public notice within the next few business days that provides further details on that phase of the auction, including the date and time that it will begin.
The C Band auction has blown through expectations about how much the auction would raise, most of which were in the $30-to-$40-odd-billion range. Even allowing for up to $9.7 billion in controversial incentive payments to incentivize satellite companies who will have to move into the upper portion of the band and about $3.3 billion in estimated relocation costs, the auction will go down in history as a blockbuster. Comparatively, the previous largest auction was the AWS-3 auction that ran in 2014-2015 and raised nearly $45 billion.
“This record-breaking spectrum auction demonstrates the wireless industry’s commitment to leading the emerging 5G economy and underscores the importance of developing a robust pipeline of spectrum auctions,” said CTIA President and CEO Meredith Atwell Baker.
It emerged this week that T-Mobile US and AT&T are both borrowing additional money to fund spectrum purchases: T-Mo borrowed $3 billion, and AT&T is looking at a whopping $14 billion in borrowing, according to Bloomberg News reports.
The 3.7 GHz auction provided 5,684 licenses, or 14 sub-blocks in each of 406 available Partial Economic Areas across the United States. The A block consists of 100 megahertz (five 20-megahertz sub-blocks) from 3.7-3.8 GHz; that spectrum will be the first to be cleared, with a deadline of December 2021. The B block consists of 100 megahertz (five 20-megahertz sub-blocks) from 3.8-3.9 GHz) and the C block makes up the final 80 megahertz with four 20-megahertz sub-blocks; that spectrum is slated to be cleared by December 2023. (There is also a 20-megahertz guard band at 3.98-4.0 GHz; satellite operators will move their operations into the top 200 megahertz of the band from 4.0-4.2 GHz.)
In the largest PEAs, the licenses were bid upon separately as A-blocks and BC-blocks. In the rest of the remaining 360 PEAs, the licenses were bid upon as a single (ABC) category. The A-block’s prices reflect the additional desirability that comes with more rapid availability and those licenses tend to have a premium price compared for more than the corresponding BC blocks.
On a nationwide basis, the average price per megahertz-POP for a Category A license (auction price only) was about $1.31, according to analysis by Sasha Javid, COO of BitPath and formerly lead of the Federal Communications Commission’s auction team. The average price per MHz/POP for BC licenses was $1.18, and for ABC licenses was $0.55.
The C Band spectrum will provide an injection of highly desired midband spectrum for 5G deployment in the U.S., with greater available capacity than other sub-6 GHz airwaves and better propagation characteristics than millimeter wave.