Auction 97 action blew past the $30 billion mark Friday morning as bidders continued to throw billions of dollars at the 1,614 spectrum licenses up for grabs. Following this morning’s round 24, total potential winning bids sat at just over $31 billion. The latest round witnessed 589 new bids totaling more than $1.1 billion.
Bidding remained heated among the auction’s most expensive offerings, with round 24 seeing three new bids for the 20-megahertz J-Block license centered on the New York City area, which had a potential winning bid price of more than $1.8 billion at the end of the round. By comparison, Stephen Wilkus from Spectrum Financial Partners noted that a similar 20-megahertz license covering an economic area centered on New York City was won for just $468 million during Auction 66 held in 2006.
J-Block licenses centered on Los Angeles and Chicago also received two new bids during the latest round, pushing their respective potential winning bids to $1.46 billion and $940 million, respectively. The Federal Communications Commission will not release the names of bidders during the proceedings, and will only announce winners once the auction concludes.
Total bids now sit at nearly triple the $10.6 billion reserve price set by the FCC. At the end of round 23, bidders also pushed the 15 megahertz of unpaired spectrum up for bid past their respective reserve prices, which had initially been set at a combined $580 million. By hitting that reserve, the FCC noted that it will now move to close bidding on specific licenses if no new bids are placed in five consecutive rounds.
Auction 97 to this point has generated 50% more in bids than did the previous auction record of $19.6 billion garnered during the 700 MHz auction conducted in 2008. That auction, also known as Auction 73, finished with 52 megahertz of spectrum being handed out to winning bidders.
The 700 MHz spectrum has become the “base” for many operators’ LTE network rollouts, with that band’s strong propagation characteristics allowing for broad network deployments. In contrast, the 1.7/2.1 GHz spectrum being offered up in Auction 97, as well as previously offered in Auction 66, has become the focus of capacity enhancements for mobile carriers, which has grown increasingly important as mobile data usage has skyrocketed.
Auction 97’s success has also allowed for the full funding of the government’s FirstNet program, which was earmarked to receive $7 billion in funding from auction proceeds. Auction 96, which was conducted earlier this year, generated more than $1.5 billion in proceeds that were also targeted to help fund FirstNet. Combined with the $10.6 billion from the current auction being set aside for relocation compensation for current users of the spectrum bands, the federal government looks set to pocket at least $15 billion from the spectrum auctions.
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