Home DAS & In Building Wireless 5G C-Band auction winds down, officially hits $80B mark

C-Band auction winds down, officially hits $80B mark

The Federal Communications Commission’s (FCC) C-Band auction (107) appears to be slowing down. The auction, which will offer flexible-use overlay licenses for spectrum in the 3.7-3.98 GHz band (3.7 GHz Service) throughout the United States, has now surpassed 80 rounds and generated $80 billion in gross bids among 57 qualified bidders. All 5,684 blocks of spectrum have sold.

“While I expected competition to be fierce in this auction given how critical this band is for 5G, I am shocked by the total proceeds generated by the bidders,” Bitpath COO Sasha Javid told Connected Real Estate Magazine. “Eighty billion dollars is more than two and half times my initial projections. My fear is that the capex spend hangover from this auction may ultimately hamper the FCC’s goals to win the global race to 5G by slowing the buildout of at least a few of the carriers.”

The highly populated markets that have paid the most per MHz-POP have remained steady throughout the auction. New York, Los Angeles, Chicago, San Francisco and Baltimore/Washington, DC remained in the top 5 as of Jan. 12. The rankings for the most expensive PEAs by price per MHz-POP among the less populated markets remains fluid, however. Last week, Connected Real Estate Magazine reported that Milwaukee, San Diego, Indianapolis, Oklahoma City and Brownsville, TX comprised the top five. Only Milwaukee (second) and Brownsville (fifth) remain just a week later. Red Oak, IA now tops the most expensive PEAs by price per MHz-POP list while Altus, OK and Enid, OK finished third and fourth, respectively.

Mid-band spectrum kept carriers active in the C-Band auction

Major wireless carriers like AT&T and Verizon were among some of the most aggressive bidders in the C-Band auction. The reason—they wanted to access the mid-band spectrum that came with the licenses. Carriers saw the available mid-band frequencies as a key component to deploying their 5G wireless networks across the U.S. As 5G-enabled cell phones and self-driving vehicles become more mainstream, it’s critical for carriers to have as much airwave access available to accommodate these technologies. It appears that Verizon will spend approximately $35 Billion, ATT $19 Billion and T-Mobile as much as $6 Billion according to estimates.

“Clearly, both Verizon and AT&T needed mid-band spectrum,” Javid told Connected. “It is now clear that both of them are willing to spend whatever it takes to get large contiguous blocks. But in terms of the number of rounds in this auction, this auction is pretty typical. There is always a ‘long tail’ in spectrum auctions.

The competition for spectrum is a main reason why Auction 107 broke the record for gross bid proceeds, according to Javid. Going forward, it’s unlikely that such numbers will be reached in future auctions—unless such valuable spectrum is at stake again.

“The success of spectrum auctions is largely driven by competition,” Javid said. “The fact that this spectrum was so desperately needed by more than one carrier drove up proceeds. I am not sure we will see another auction like this for a few years.”

Joe Dyton can be reached at joed@fifthgenmedia.com.

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