Following back-to-back 5G-suitable spectrum auctions, the U.S. Federal Communications Commission (FCC) revealed the registered bidders ahead of this summer’s planned 3.5GHz sale.
Today, we look at 5G auctions to date and identify the operators who are spending big to strengthen their spectrum portfolios.
Where It All Began
The FCC staged its inaugural auction of spectrum licenses way back in 1994. Auction 1, which involved the sale of Nationwide Narrowband PCS concessions, saw six bidders win 10 licenses. This included AirTouch and BellSouth Wireless, which paid $47.0 million and $47.5 million, respectively. Legacy FCC documentation indicates that the auction generated $617 million in total.
AirTouch and BellSouth evolved into Verizon Wireless and AT&T Communications—the two largest U.S. mobile operators today. And in the quarter-century that has passed, the U.S. has proven to be a prolific auctioneer of spectrum rights, recently concluding Auction103.
Note: While the 600MHz frequencies featured in 2016-17's sequentially-confusing Auction 1002 have been used to support 5G by the likes of T-Mobile US, this blog feature will focus on spectrum sales that have taken place in the 5G-era.
Auction 101
Spectrum Band: 27.5GHz-28.35GHz (28GHz)
Start Date: 14 November 2018
End Date: January 24, 2019
Total Bids: $702.57 million
Notable Bidders: Verizon ($505.7 million, 1,066 regional licenses); US Cellular ($129.4 million, 408 regional licenses); and T-Mobile US ($39.3 million, 865 regional licenses)
In July 2016 the FCC adopted new rules governing wireless broadband operations in millimeter wave (mmWave) frequencies above 24GHz.
In doing so, the regulator claimed that the U.S. was the first country in the world to make this spectrum available for “next generation” wireless services. The auction for 5G-suitable 28GHz band spectrum licenses commenced November 2018 and concluded January 2019, after 176 rounds of bidding.
In July 2016 the FCC adopted new rules governing wireless broadband operations in millimeter wave frequencies above 24GHz. In doing so, the regulator claimed that the U.S. was the first country in the world to make this spectrum available for “next generation” wireless services.
The auction generated total bids of $702.6 million, with offers for 2,965 of the 3,072 available Upper Microwave Flexible Use Service licenses. Auction 101 was dominated by mobile market leader Verizon, which spent $505.7 million, followed by US Cellular ($129.4 million) and T-Mobile US ($39.3 million).
Auction 102
Spectrum Band: 24.25GHz-24.45GHz and 24.75GHz-25.25GHz (24GHz)
Start Date: March 14, 2019
End Date: April 17, 2019
Total Bids: $1.99 billion
Notable Bidders: AT&T ($982 million, 831 regional licenses); T-Mobile US ($803 million, 1,346 regional licenses; and US Cellular ($126.6 million, 282 regional licenses)
Bidding for 24GHz band licenses commenced less than two months after the conclusion of the 28GHz auction.
This auction involved an initial clock bidding phase for generic blocks in each Partial Economic Area, followed by an assignment phase to allow winners of the generic blocks to bid for frequency-specific licenses assignments. The 24GHz licenses were offered in seven 100MHz blocks.
The clock phase ended April 17, 2019, after 91 rounds, generating total bids of $1.989 billion.
AT&T was the big winner, paying $982 million for 831 of the 2,909 available licenses. Next in line was T-Mobile US ($803 million, 1,346 licenses), followed by US Cellular ($127 million, 282 licenses).
Auction 103
Spectrum Bands: Upper 37GHz (37.6GHz-38.6GHz), 39GHz (38.6GHz-40GHz) and 47GHz (47.2GHz-48.2GHz)
Start Date: December 10, 2019
End Date: January 30, 2020
Total Bids: $7.57 billion
Notable Bidders: Verizon ($3.4 billion, 4,940 regional licenses); AT&T Communications ($2.4 billion, 3,267 regional licenses); T-Mobile US ($931.6 million, 2,384 regional licenses); DISH Network ($202.5 million, 2,651 regional licenses); US Cellular ($146.3 million, 237 regional licenses); and Sprint ($113.9 million, 127 regional licenses)
The auction of 100MHz licenses in the Upper 37GHz, 39GHz, and 47GHz bands commenced in December 2019 and concluded January 30, 2020.
The clock phase of the auction ended after 104 rounds of bidding, with 35 bidders registering offers for 14,142 of the 14,144 licenses on offer. The subsequent assignment phase concluded March 5. In total, the auction process generated bids worth $7.57 billion.
Verizon and AT&T dominated proceedings, both bidding under different names. Verizon bid through the Straight Path Spectrum unit it acquired in February 2018, offering $3.4 billion for a total of 4,940 licenses, while AT&T bid via FiberTowerSpectrum Holdings, offering $2.4 billion for 3,267 concessions.
Verizon and AT&T dominated proceedings, both bidding under different names. Verizon bid through the Straight Path Spectrum unit it acquired in February 2018, offering $3.4 billion for a total of 4,940 licenses, while AT&T bid via FiberTowerSpectrum Holdings (also acquired in February 2018), offering $2.4 billion for 3,267 concessions.
Next in line was T-Mobile US (bidding as T-Mobile License), which committed to pay $931.6 million for 2,384 spectrum permits, followed by US Cellular ($146.342 million, 237 licenses), while Sprint (bidding as ATI Sub) agreed to buy 127 licenses for $113.948 million.
Another eye-catching bidder was satellite TV giant-turned-wireless market aspirant DISH Network (bidding as Window Wireless), which offered $202.5 million for 2,651 concessions.
Auction 105
Spectrum Band: 3550MHz-3650MHz (3.5GHz)
Start Date: July 23, 2020
End Date: TBC
Total Bids: TBC
Notable Bidders: TBC
In March 2020 the FCC confirmed that it had rescheduled its planned auction of frequencies in the 3.5GHz band as a result of the COVID-19 pandemic.
The spectrum sale–which had been scheduled to begin on June 25– will now start on July 23. The auction will offer seven Priority Access Licenses (PALs) in each county-based license area, for a total of 22,631 PALs nationwide.
Each PAL will be a 10-year renewable license, consisting of an unpaired 10MHz channel.
In early-June 2020 the FCC confirmed that it had received 348 applications from companies interested in taking part in its auction of 3.5GHz spectrum. Of the applications received, the FCC said that 106 were complete, while a further 242 were incomplete.
To become a qualified bidder for Auction 105, each applicant in the latter category must resubmit its application, having corrected any deficiencies, and make the required upfront payment by June 19, 2020.
Registered bidders with complete paperwork included AT&T Spectrum Frontiers, Cincinnati Bell, Cox Communications, Frontier Communications, Mediacom, Puerto Rico Telephone Company (Claro), Shenandoah Cable Television, TeleGuam Holdings (GTA), US Cellular, and Windstream.
Meanwhile, registered bidders with incomplete documentation included Aeronet Wireless Broadband, Cable ONE, Consolidated Communications, DOCOMO Pacific, T-Mobile US, and Verizon Wireless.
Satellite TV giant DISH Network is also understood to be on this list, bidding as Wetterhorn Wireless.
With each successive 5G auction generating significantly higher bids than the last, the 3.5GHz sale is expected to be the FCC’s most lucrative auction to date.
With each successive 5G auction generating significantly higher bids than the last, the 3.5GHz sale is expected to be the FCC’s most lucrative auction to date.
With interested parties including a mixture of mobile giants, fixed-line operators, cablecos, regional telcos, and utility firms–alongside major companies such as Chevron and Deere & Company–bidding is sure to be fierce, as participants line up to harness the power of 5G.
Tom Leins
Tom Leins is a Senior Research Analyst for TeleGeography’s GlobalComms Database. Based out of the company’s UK office, he also contributes to the company’s daily CommsUpdate newsletter, which includes his popular weekly MVNO Monday round-up. MVNO industry aside, Tom has developed a strong specialization in the U.S., Latin America, and the Caribbean, tracking mergers and acquisitions, spectrum auctions, regulatory developments, market opportunities, and growth trends.