Get ready for it: the C-band auction will soon be called the “biggest spectrum auction ever,” referring to the amount of proceeds. Keep in mind that the sheer amount of spectrum licensed (280 MHz) vastly exceeds what has been offered in any prior single auction.
The former “record” for gross proceeds was the 2015 AWS-3 auction of 65 MHz of mid-band spectrum in the 1.7 GHz to 2.2 GHz frequency ranges. The AWS-3 auction raised about $45 billion.
After 44 bidding rounds, the C-band auction (Federal Communications Commission Auction 107) seems to have already reached $70 billion. But keep in mind that the C-band assets represent capacity at least four times greater than was the case for AWS-3.
Generally speaking, the most-recent spectrum auction is a guideline for expected prices in the current auction, but the comparison with the Citizens Broadband Radio Service auction earlier this year is not necessarily “like compared to like.” Most significantly, the CBRS licenses are not as unrestricted as C-band licenses will be.
Since CBRS uses a shared spectrum approach, in many areas the existing licensees will have first use of the spectrum. Only where the assets are not required will secondary licensees have rights to use the frequencies. Also, where there is excess capacity, and neither the primary or secondary licensee uses all the spectrum, unlicensed use is permitted.
So prices for CBRS, all other things being equal, were expected not to reach the levels of the C-band assets, which are unrestricted and exclusive in terms of use.
Spectrum prices in the recent CBRS auctions (also of new mid-band spectrum) generated average prices per person (per MHz-POP) of about 21.6 cents. The C-band auction already has average prices of about 79 cents per MHz-POP, higher when including the additional clearing payments to existing licensees. Including those payments, we already have hit about 95 cents per MHz-POP in the C-band auction.
Prices for the A block of frequencies, which it is estimated can be put into commercial use as much as two years earlier than the BC block, are running higher. After the end of round 44 of bidding, A block licenses were at an average of $1.21 per MHz-POP, with a price of $1.54 including the cost of clearing existing users from the spectrum.
The other relatively-recent precedent, the AWS-3 auctions, also set a record for gross proceeds at the time. But AWS-3 arguably most affected AT&T’s ability to keep pace with Verizon’s 4G spectrum assets.
The C-band auction is more strategic, in that it is, for all providers but T-Mobile, the primary way 5G using mid-band can be provided. And mid-band 5G is important because it provides the “best” blend of coverage and capacity for 5G, as 5G rollouts in other countries illustrate.
It remains unclear is whether the C-band auction prices will top the AWS-3 auction of mid-band spectrum held in 2015, when prices reached $2.90 per MHz-POP, on average. At least so far, prices do not seem in danger of reaching levels that might be deemed excessive.
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