FCC C-band auction ends at record $80.9bn

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The FCC has wrapped the main phase of bidding in its Auction 107 for C-band frequencies over the US which will be used for 5G telephony. Winners will now take the next stage and bidding for frequency-specific licences during the ‘assignment phase’ of the auction.

The end-result even exceeds the most optimistic guesstimates from the C-Band Alliance which had predicted a probable maximum total of $75 billion (€62.13bn) could be generated by its own auction of spectrum.

“These results represent a strong endorsement by the private sector of the service rules and transition plan put in place by the FCC to quickly make the C-band a critical part of 5G rollout in the United States,” FCC Chairman Ajit Pai said in what is probably his final statement before his retirement this week.

“And they vindicate the hard choices the FCC made during the C-band proceeding—and that we made them in the first instance,” Pai added. “The FCC confronted a host of technical, legal, practical, and political challenges in structuring this auction. It would have been easy to delay. But we rightly pushed ahead and overcame every one of those obstacles. As a result, we significantly advanced United States leadership in 5G and have enabled America’s wireless consumers to more quickly benefit from 5G services.”

News should emerge as to the winning bidders, and while the likes of AT&T, Verizon and T-Mobile will capture plenty of headlines, do not be surprised if Charlie Ergen emerges as a key participant.

The auction has generated record interest from the 57 registered bidders who were looking at 5,684 licences on offer. The exercise went through 97 bidding rounds.

The auction’s near-$81 billion gross bids is significantly more than the previous record of $44.9 billion in the 2014 AWS-3 proceeds. There will be some bidders who will qualify for discounts on their tabled bids.

The bidding also generated impressive values on a ‘price per MHz of population’ (MHz/POP). In Auction 105, the average price was just $0.2169).  This latest auction saw Category A blocks (the 46 large markets) achieve an average of $1.30 per MHz POP, and an overall auction average of 94 cents/MHz POP.

But inevitably there were certain population areas which created genuine excitement. For example, the small town of Red Oak, Iowa (with a population of just 5,700) took the record after 67 competitive rounds of $2.83 per/MHz POP. Someone certainly wanted the extra capacity!!

There were plenty of $2 areas (Milwaukee, San Diego, Indianapolis) while the super-large conurbations of New York (25.2 million population, and $1.04/MHz POP in Category A). Los Angeles (19.4m population, and $1.42/MHz POP).

“The FCC should issue a Public Notice shortly laying out the process and anticipated timing for the assignment phase, in which winning clock round bidders can bid additional funds to obtain specific channel blocks in each market. Winning bidders will be announced once the assignment phase is completed,” says a note from Wiley Rein LLP which described the bidding as “intense”.

Ari Meltzer of Wiley Rein, adds: ““The results of Auction 107 demonstrate the critical importance of mid-band spectrum to satisfy the growing needs of the American public for 5G wireless broadband services. We have heard the term “beachfront” used to describe various bands over the last several years, but the market has spoken, and it has confirmed that mid-band has the view and the amenities to go with it.”


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