Auction 108 of spectrum in the 2.5 GHz spectrum band got underway last Friday. Nearly $103.5 million was raised in just a single auction round.
The 2.5 GHz band is considered mid-band spectrum, which is viewed as supporting the optimum mixture of speed and coverage for mobile and fixed 5G. Eighty-two companies qualified to bid in the auction, including the three major nationwide providers – AT&T, Verizon, and T-Mobile – as well as smaller providers and emerging nationwide provider Dish.
Licenses will be issued by county, with up to three licenses available per county. A large amount of spectrum in the band, particularly in urban areas, is already in use through T-Mobile and some is licensed to tribal entities and others.
Accordingly, anyone winning licenses in certain counties will not be able to deploy service throughout the entire county, but only in portions of the county that are not already covered. For this reason, the auction is not expected to raise as much money as some previous auctions have raised.
Unlike in some previous auctions, Auction 108 participants are bidding on specific licenses in a license area. In some previous auctions, all licenses were of equal size. Accordingly, participants initially bid on generic licenses within a license area.
Winning bidders subsequently bid on specific licenses within the license area. But the three licenses available in the 2.5 GHz auction are of different sizes – either 17.5 MHz, 49 MHz, or 51 MHz.
2.5 GHz Spectrum Auction Results So Far
In total, 8,017 licenses are available, and the vast majority of licenses – 7,849 – received bids, according to data compiled by Sasha Javid, who is chief operating officer for BitPath and who also has a tradition of providing an analysis of ongoing FCC spectrum auctions.
For more half of the licenses – 4,395 — demand is equal to supply, according to Javid. This means there was a single bidder for the license and that bidder may ultimately win the license, although there is a possibility that another participant could opt to bid on the license in a later bidding round.
At least two bidders have placed bids for 3,454 of the licenses, while 168 licenses have received no bids.
Javid has sliced and diced the auction data in multiple ways. In addition to providing an analysis of price per MHz pop, he also has created maps showing the extent to which each license in each license area is encumbered. Specifically, he shows which counties have incumbent providers already covering up to 50%, up to 75% or between 75% and 100% of the county.
Most FCC spectrum auctions are for areas larger than counties. Several recent auctions have used partial economic areas (PEAs), which typically encompass multiple counties. Although the large nationwide carriers prefer larger license areas, it’s difficult for smaller carriers to afford to buy licenses for larger areas.
The decision to use county-size licenses for the 2.5 GHz auction likely stemmed from the largely rural nature of the spectrum available. A previous auction of county-size licenses in the CBRS band had 228 winners, including many smaller, more rural companies. But with only 82 qualified bidders, we won’t see so many small winners, or so many winners at all, in the 2.5 GHz auction.