Gross proceeds in the third U.S. millimeter wave spectrum auction topped $7 billion this week, as competition continues to cool.
As of Tuesday afternoon after 48 rounds, gross proceeds in Auction 103 totaled $7,148,673,728 during the auction’s clock phase for spectrum licenses in the 37 GHz, 39 GHz, and 47 GHz bands. That figure has climbed by more than $1 billion since bidding resumed last week after a holiday break, though competition has decreased since the FCC’s third 5G spectrum auction kicked off on December 10.
In total the FCC is offering up 3,400 megahertz of high-band 5G spectrum, licensed as 100-megahertz blocks based on Partial Economic Areas (PEAs). There are 14,144 licenses in total, including roughly 10,000 in category MN (37.6-38.6 GHz and 38.6-40 GHz) and about 4,000 in category P (47.2-48.2 GHz).
The nationwide price per MHz-POP was $0.007179 at the end of round 48, compared to $0.009112 per MHz-POP that Auction 102 reached after 91 rounds, according to auction data tracked by Sasha Javid, COO of Spectrum Consortium and former chief data officer and legal advisor for the FCC Incentive Auction Task Force.
There are 35 qualified bidders participating in the clock phase and as of Tuesday afternoon demand outpaced supply for just 72 products, compared to 360 that had less demand than available supply.
Top markets have brought in the highest cumulative totals, including New York City ($947 million), Los Angeles ($740 million), and Chicago ($356 million), though remaining competition is focused on smaller markets. The top 10 PEAs by price per MHz-PoP after round 48 include markets such as Valentine, Nebraska; Haskell, Texas; and Anamosa, Iowa. The 20 PEAs with the greatest change in demand from the prior round included increased demand in Rock Hill, S.C.; Pensacola, Florida; and Roanoke, Virginia, according to Javid’s data.
Since the FCC already auctioned off millimeter wave licenses at Auction 101 (28 GHz band) and Auction 102 (24 GHz), there had been some concern about a tempered appetite for still more high-band spectrum. Brian Goemmer, president of AllNet Insights, said he anticipated a lot of interest in the 37-39 GHz band given that both Verizon and AT&T had deployed networks using Special Temporary Authority (STA) from the FCC in many PEAs over the last year. Verizon just recently sought separate FCC permission to use a portion of the 37.6-40 GHz band in northwest Arkansas for testing purposes.
"Both AT&T and Verizon were asking for 400MHz channels in their STAs so that would have been the bare minimum that they would want from this auction," Goemmer said in comments to FierceWireless. "Considering that Verizon typically controls 2 - 400MHz channels in the 28GHz band, it is not surprising that both AT&T and Verizon would want 800MHz each in total so they would have a second channel for growth."
He noted that AT&T and Verizon's collective interest in the 37-39 GHz spectrum would gobble up two-thirds of the 2,400 megahertz of available spectrum in that category.
According to Javid's most recent auction update, the price per MHz-PoP for 37 GHz and 39 GHz (category MN) continues to be higher than 47 GHz (category P), with the former standing at $0.009143 after 48 rounds, compared to the latter at $0.001163.
"It is interesting to see the interest in the 47GHz quantified," Goemmer said. He added that while the 39 GHz band clearly has a better ecosystem in terms of deployed networks, the price differential for 37-39 GHz compared to 47 GHz detailed by Javid after round 48 "is a bit surprising."
"The fact that there are PEA markets that have not received a 47GHz bid, I think relates to the challenges in deploying mmWave spectrum outside of urban centers and the limited appetite in rural areas has already been met with the 24, 28, and 37-39GHz bands," Goemmer said.
Earlier after the first round of auction action, Javid had said he would be pleasantly surprised if bids surpassed $2 billion, but in a December blog post wrote that the auction was going better than expected and “ should make the FCC feel better about its decision to put so much mmW spectrum (3400 MHz) up for sale so quickly after two prior mmW auctions.”
At the time, based on Auction 102 results, Javid forecast that gross proceeds could reach in the $6.8 billion range during the ongoing auction, a figure that Auction 103 has now hit and surpassed.
Article updated to include comments from AllNet Insights' Brian Goemmer and accurately reflect he said AT&T and Verizon's interest would consume two-thirds of the 2,400 megahertz of available 37-39 GHz spectrum, not the total auction of 3,400 megahertz of spectrum.