Bids top $2B at FCC’s third mmWave spectrum auction

auction bidding
Gross proceeds during day 5 of Auction 103 hit the $2 billion threshold and surpassed the total generated in Auction 102.

Gross proceeds from the FCC’s third high band 5G spectrum auction surpassed the $2 billion mark on day five of auction action.

In less than a week, Auction 103 has garnered a higher total than the FCC’s 102 second millimeter wave spectrum auction, which earlier this year brought in about $2.02 billion for licenses in the 24 GHz band.

Auction 103 includes licenses in the upper 37 GHz, 39 GHz, and 47 GHz bands and by Monday afternoon proceeds tallied about $2.07 billion after 12 rounds of bidding in the clock phase. There are still two more bidding rounds scheduled for Monday afternoon.  

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The quick uptick in bids is encouraging for some including Sasha Javid, current COO at the Spectrum Consortium and former chief data officer and legal advisor for the FCC's Incentive Auction Task Force in 2016. 

RELATED: Auction 103 concludes second round with $715M in bids

“With Auction 103 now racing past $2 billion in total gross proceeds in Round 12 and aggregate demand increasing or remaining relatively constant nationwide, it is fair to say that this mmW spectrum auction will not be quite as disappointing as I initially feared,” wrote Javid in a blog post.

Javid previously told FierceWireless he would be “pleasantly surprised” if the latest mmWave auction crossed the $2 billion mark.

With a strong initial focus on mmWave spectrum for 5G, the U.S. has been somewhat of an outlier compared to other countries that focused on opening up mid-band spectrum. Having already completed two millimeter wave auctions, the FCC is freeing up a total of 3,400 MHz of additional high-band spectrum this time around with 35 bidders participating.

The agency is planning its first mid-band spectrum auction in 2020. However, with the large amount of mmWave spectrum already made available in Auction 101 and Auction 102, it was uncertain if the appetite for high-bid licenses would remain strong.  

In October, Brian Goemmer, president of AllNEt Insights & Analytics, told FierceWireless in October that he thought demand could be lower than earlier 5G spectrum auctions, as carriers work still work to put their current holdings to use.

“There’s so much of it [millimeter wave spectrum] that’s already been brought to the marketplace that hasn’t even started to be used yet,” Goemmer said at the time.

RELATED: Will carriers bet big at the third mmWave 5G auction?

Javid also still appears cautious about how heated competition will get, writing Monday, “I still believe that the large quantity of spectrum made available in this auction will dampened competition, and therefore total proceeds. But we will see in the coming days.”

Javid, who is tracking the auction on his website, noted that the price per MHz-POP is “still just $0.002292 nationwide (roughly a quarter of the price per MHz-POP that the FCC generated in Auction 102)," though gross proceeds have notably surpassed the 24 GHz auction.

He stressed that the word “gross” is important when looking at proceeds because incumbents in the 39 GHz band will receive bidding credits that can be applied against winning bids if they win blocks in the band dubbed category "MN."  

“It is possible that incumbents in the band are bidding more aggressively for these blocks knowing that they will receive bidding credits which will reduce the total price paid,” wrote Javid. “And if they do not win, the incumbents will still receive incentive payments which will be based on the final clock price for these blocks ...yet another reason to bid more aggressively.”

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