Auction 108 of spectrum in the 2.5 GHz band closed today after raising less than $428 million, a considerably lower amount in comparison with what we have seen in other recent auctions.
The spectrum is considered mid-band, which is widely seen as supporting the optimum mixture of speed and coverage for 5G. But most of the available spectrum in the band is in rural areas.
The identity of the winners has not yet been revealed, but among the 82 companies that qualified to bid in the auction were all major U.S. wireless carriers – AT&T, T-Mobile, Verizon and Dish.
T-Mobile already holds a large amount of spectrum in the 2.5 GHz band. The company acquired the spectrum when it merged with Sprint, which had accumulated the spectrum over the years through agreements with educational entities, many of whom had not used the spectrum for its intended purpose of supporting educational broadcasts.
Licenses in the 2.5 GHz band are for individual counties, and up to three blocks of spectrum – ranging in size from 17.5 MHz to 50 MHz — were available per county. According to the FCC, the vast majority of licenses received winning bids. Of 8,017 licenses that were available, 7,972 were won.
Because bidders won specific spectrum blocks, there will be no need for an assignment round. According to Sasha Javid, who is chief operating officer for BitPath and who also offers a daily analysis of ongoing wireless auctions, this means the FCC is likely to announce the winners in about one week.
Auction 108 was completed relatively quickly – just under one month after it opened.
Counties are the smallest geographic unit for which the FCC has ever auctioned licenses. The decision to use that size license area was likely driven by the highly rural nature of the auction. Smaller companies that serve rural areas generally cannot afford licenses for larger areas.
Auctioning licenses by county yielded an unusually high number of 228 winning bidders in the CBRS auction of 2020 and winners included many smaller providers. But the county-size approach will not be able to generate the same results for the 2.5 GHz auction because only 93 companies applied to bid in the auction and of those, only 82 ultimately qualified to bid.