Editor’s Corner—Comcast, Charter, Altice sit out FCC’s mmWave spectrum auctions for 5G

Comcast Xfinity van
Comcast, which operates through the Xfinity brand, does not appear to be participating in the FCC's upcoming auction.

Mike Dano

It appears that three of the nation’s largest cable companies are not planning to bid on millimeter-wave spectrum licenses. The development likely stands as a major blow to the FCC—the government agency charged with raising money through the spectrum auction—as well as the network equipment vendors that were likely hoping to sell mmWave equipment to auction winners like Comcast and Charter.

Interestingly, though, it appears that Cox—the nation’s third-largest cable operator—is participating in the FCC’s spectrum auction.

Further, many of the nation’s top wireless players—as well as a wide range of smaller wireless providers—are planning to participate in the auction. AT&T, Verizon and T-Mobile all filed applications to bid on 28 GHz and 24 GHz spectrum licenses in the FCC’s upcoming millimeter-wave spectrum auctions. Sprint too appears to be planning to participate in the auction, as is Dish Network and U.S. Cellular.

A wide range of smaller and rural wireless operators filed applications to bid, including Bluegrass Cellular, Union Wireless and Nsight’s Cellcom.

A pair of wired telecom operators also signaled their interest in participating: Windstream and Frontier Communications. Interestingly, both of those operators are also testing or deploying fixed wireless services to expand their coverage into rural areas.

A handful of venture capital companies, including Columbia Capital, have also filed applications to participate in the auctions.

Another surprising name on the FCC’s bidder list is satellite company Viasat. The same goes for Starry, which is a fixed wireless internet provider embarking on a major build-out across more than a dozen U.S. metro areas.

The absence of Comcast, Charter and Altice is particularly noteworthy considering all three companies have either launched mobile services through an MVNO or are planning to. Further, most of these cable companies voiced support for the FCC’s millimeter-wave auction plans: “Charter is particularly excited about the opportunities presented with this high-band spectrum and is exploring how to use it to deliver ultrafast, high capacity services to consumers in communities across the country—large and small, as well as urban, suburban, and rural,” the company said in comments to the FCC earlier this year about the agency’s millimeter-wave auction plans.

That said, Comcast and Charter could still purchase spectrum at some point. "If Comcast and Charter had registered, it would have been supportive of our thesis that they will have a much bigger impact in the wireless market than most expect; however, not registering doesn’t demonstrate a lack of commitment to wireless,” wrote the analysts at Wall Street firm New Street Research. “They have always been more focused on the CBRS band, and they will likely also focus on the C-Band if this becomes available.”

Navigating auction filings

As in previous spectrum auctions, the FCC released the names of the entities that filed applications to participate in its upcoming millimeter-wave spectrum auctions. However, the names of the bidding entities don’t always line up exactly with the companies that have an ownership stake in those entities. Verizon, for example, is bidding through “Cellco Partnership d/b/a Verizon Wireless,” while AT&T is bidding through “AT&T Spectrum Frontiers LLC.”

Sometimes the identity of the bidding entity isn’t clear at all. For example, Dish is participating through the bidding entity called “Crestone Wireless L.L.C.” A Dish representative wouldn’t confirm that Dish is the owner of Crestone, but Crestone’s ownership documents filed with the FCC make it clear that Dish is the company behind the “Crestone Wireless” bidding entity. The same goes for ATI Sub LLC (Sprint), mmWaveBroadband Co. (Viasat) and High Band License Co LLC (Columbia Capital).

But a careful check of all the entities that applied to bid in the FCC’s upcoming millimeter-wave spectrum auctions turned up no reference to Comcast, Charter or Altice. Representatives from those cable companies either didn’t return requests for comment or declined to comment. (That’s pretty standard when it comes to FCC auction behavior.)

So what does the absence of Comcast, Charter and Altice mean? First, it means that FCC Chairman Ajit Pai won’t be able to boast about vigorous demand for millimeter-wave spectrum licenses. Indeed, many of the entities that filed applications to bid in the FCC’s upcoming mmWave spectrum auctions are the same players that have participated in past auctions—meaning the FCC’s high-band spectrum auctions do not appear to have drawn out many new faces.

That may stand as a setback to Pai, who boasted in July that “with so many wanting so much spectrum for 5G, we’re moving as quickly as possible to make these bands available for commercial use.”

It’s worth noting that the FCC’s most recently completed auction—the 600 MHz incentive auction of TV broadcasters’ unwanted licenses that was touted as a "spectrum extravaganza"—ended with T-Mobile as the only major nationwide wireless carrier that’s actually using those licenses. Sprint never participated in the auction, Verizon said it would participate but then ended up not buying anything, and AT&T inked a deal earlier this year to sell off all of its 600 MHz licenses.

However, it’s also worth noting that the FCC’s first millimeter-wave spectrum auction—auction 101 of 28 GHz licenses that starts in November—won’t actually release much spectrum that’s usable. Specifically, it will only offer spectrum licenses covering around 24% of the U.S. population.

However, the situation might be a little different in the 24 GHz auction—auction 102—that the FCC has scheduled to start shortly after the 28 GHz auction. The 24 GHz auction will offer licenses in all of the nation’s 416 Partial Economic Areas—meaning nationwide.

Valuing millimeter-wave spectrum

All that said, there’s no telling how much money the FCC’s millimeter-wave spectrum auctions will actually raise. That’s because the value of mmWave spectrum isn’t yet clear; the best estimate for the value of this spectrum comes from Verizon’s $3.1 billion purchase of Straight Path in 2017. Indeed, that purchase, and Verizon's earlier acquisition of XO, gave Verizon ownership of a significant swath of the nation's 28 GHz spectrum, which is a big reason the FCC's upcoming 28 GHz auction isn't nationwide.

Here's a chart from New Street Research of the nation's 28 GHz ownership situation:

Further, this is the first time in the modern smartphone era that the FCC will be auctioning mmWave spectrum bands. Such bands are not like other traditional cellular spectrum bands; millimeter-wave bands can generally only transmit signals relatively short distances—like several hundred meters—whereas traditional midband or low-band cellular spectrum can transmit signals several miles or more, depending on operators’ technologies and spectrum configurations. Further, mmWave spectrum blocks are generally much wider—like 100 MHz wide or more—whereas low- or midband spectrum blocks are typically 10 MHz wide.

That makes it difficult to predict mmWave auction values based on previous FCC auction results.

Regardless, the FCC’s upcoming mmWave spectrum auctions will be critical to watch because all of the country’s nationwide wireless network operators have described millimeter-wave spectrum as a critical part of 5G. Indeed, both AT&T and Verizon are either using such spectrum or are planning to use such spectrum for their initial 5G network build-outs.

Transmissions in millimeter-wave spectrum bands can carry far more data than transmissions in lower spectrum bands—and that’s why such spectrum has been described as ideal for 5G. However, it doesn’t appear to be ideal for some of the nation’s biggest cable companies. — Mike | @mikeddano

"Editor's Corners" are opinion columns written by a member of the FierceWireless editorial team. They are edited for balance and accuracy.

Article updated Oct. 11 to remove be Falkenberg Capital from the list of bidders.