Auction now shifts to an assignment phase for individual spectrum blocks
The 3.45-3.55 GHz auction of 100 megahertz of midband spectrum has wrapped up its first phase after 151 rounds, raising $21.888 billion in bids and making it the third-highest grossing auction that the agency has held.
Now the auction moves into its assignment phase, in which winning bidders indicate preferences for specific blocks of spectrum within the license-areas which they have won.
“The results of Auction 110 demonstrate once again the critical importance of mid-band spectrum to satisfy the growing needs of the American public for 5G wireless broadband,” said Ari Meltzer, partner in law firm Wiley’s Telecom, Media and Technology practice, in a statement on the clock phase conclusion. “The 3.45 GHz auction is now the third highest grossing FCC auction behind only the C-band and AWS-3. As the industry continues to roll out new and innovative services built on 5G networks, the demand for 5G spectrum is only going to increase.”
The Federal Communications Commission’s two most midband spectrum auctions, the blockbuster C-Band auction (Auction 107) and the auction of shared CBRS spectrum, raised more than $80 billion and more than $4.58 billion, respectively. (For a more complete recap of recent midband spectrum auctions in the U.S., read this.)
The 3.45 GHz auction, also known as Auction 110, offered 100 megahertz of prized midband spectrum, divided into ten 10-megahertz blocks, licensed by geographic areas known as Partial Economic Areas (PEAs), for a total of 4,060 flexible-use licenses across the contiguous United States. Sasha Javid, COO at Bitpath and former chief data officer and legal advisor on the FCC’s Incentive Auction Task Force, is once again providing auction tracking that can be found here.
Only 19 licenses were unsold, located in small markets in Arkansas, Louisiana, Virginia, Missouri and South Carolina.
There are some caveats that come along with the use of the 3.45 GHz band. The FCC placed limitations on how much of it that any single bidder could accumulate: Bidders can’t hold more than four out of the 10 available licenses in a given PEA, or 40 megahertz of spectrum. In addition, there are nearly three dozen areas around the country where licenses winners will have to coordinate their use of the band with existing incumbent military systems; those areas include military training facilities, Navy home ports, shipyards and military test sites across the Western U.S., the Midwest and up the East Coast. The Department of Defense has been using the 3.45 GHz band for high- and low-powered radar systems, including fixed, mobile, shipborne and airborne systems, as well as testing and training related to those systems. For a deeper dive on the coordination locations, check out Javid’s auction tracking page.
There were 33 qualified bidders participating in the 3.45 GHz auction. All three national cellular network operators are participating, as well as Dish Network (reportedly bidding under the name Weminuche LLC), US Cellular and a number of small and regional network operators. Telecom-focused private equity company Grain Management, which bid $1.277 billion for 10 C-Band licenses and was the fifth-highest bidder overall, is participating as NewLevel III.
The FCC has noted that the 3.45 GHz band, plus the neighboring 3.5 GHz CBRS band and the 3.7 GHz C Band spectrum, represent 530 megahertz of contiguous midband spectrum for 5G. Acting FCC Chairwoman Jessica Rosenworcel has said that the build-out requirements for 3.45 GHz are the “most aggressive build-out obligations of any spectrum auctioned for 5G to date. … We insist on getting infrastructure built twice as fast as what the agency has required in other recent 5G bands.”
Those build-out benchmarks include providing service to at least 45% of the population in areas where bidders win licenses within four years, and at least 80% of the population within eight years for mobile or point-to-multipoint services. If the licenses are used for IoT services, winners have to build out to 35% of the geographic area won within four years and 65% of the geographic area within eight years.
“Bidders participating in Auction 110 have reaffirmed how important it is for the U.S. communications industry to gain access to additional spectrum to serve the 5G wireless needs of American consumers and businesses,” said Richard B. Engelman, consultant with Wiley’s Telecom, Media and Technology practice. “Bidders demanded 3.45 GHz blocks in every Partial Economic Area and at prices that approached – or in some cases exceeded – the prices paid earlier this year in Auction 107.”
Wiley expects that the auction’s assignment phase will be completed and the auction’s final results available sometime in mid-to-late December.
