Day one of Auction 110 of spectrum in the 3.45 GHz band raised $672.4 million, the FCC said this afternoon.
Thirty-three companies qualified to bid in the auction, including all three nationwide wireless providers – AT&T, T-Mobile and Verizon.
The spectrum is considered mid-band spectrum, which many stakeholders view as providing the optimum mixture of speed and coverage for 5G service. But while the previous mid-band auction of C-band spectrum set records by raising $81 billion, the new auction is unlikely to have such impressive results, as considerably less spectrum is at stake – 100 MHz in total, compared with 280 MHz in the C-band auction.
Another concern about the 3.45 GHz auction is that no service provider is allowed to win more than 40 MHz of spectrum in a license area, notes Sasha Javid, who is chief operating officer at Bitpath and who provides in-depth analysis of ongoing spectrum auctions.
The 3.45 GHz auction includes 10 licenses per partial economic area (PEA) and each license is for 10 MHz of spectrum.
In some areas, spectrum in the 3.45 GHz band will be shared with the U.S. military, which will have priority use of the band. Accordingly, the FCC established two classes of licenses – one for spectrum in areas where the military operates and another for other areas.
Initial 3.45 GHz Auction Results
According to Javid’s data, as of the end of today’s bidding, there were 192 PEAs where demand for licenses exceeds supply, 42 where demand equals supply and 172 where demand is less than supply.
Companies that placed bids in PEAs where demand equals or is less than supply could be well positioned to win the licenses for which they bid, assuming the auction raises at least $14.8 billion, which is the reserve price. But bidders sometimes drop out of bidding for certain PEAs in subsequent rounds, and sometimes new companies begin bidding on PEAs that they didn’t initially bid on later in the auction.
The reserve price was based on the government’s estimate of what it will cost to relocate incumbent users.
An estimate from financial analysts at LightShed Partners estimates that the 3.45 GHz auction will raise $31 billion, according to a report from Fierce Wireless.