C-band's first phase tops charts with $80.9B

court decision
The auction made available licenses for 280 megahertz of spectrum in the 3.7-3.98 GHz band.(Getty Images)

Bidding in the clock phase of the FCC’s C-band auction closed on Friday as the highest-grossing spectrum auction ever held in the U.S., with gross proceeds exceeding $80.9 billion. The previous record was $44.9 billion from the AWS-3 auction in 2015.

This auction made available licenses for 280 megahertz of spectrum in the 3.7-3.98 GHz band, a portion of the C-band. Winners are not yet known, but Verizon is among those widely believed to have spent big-time in the auction.  

The $80.9 billion haul after 97 rounds of bidding topped most analysts’ expectations, with projections ranging from $23.5 billion to $35.2 billion at Morgan Stanley Research. Sasha Javid, COO at BitPath who has been providing a play-by-play of the action on LinkedIn, had predicted the auction would generate between $25 billion and $30 billion, and that was off by a “whopping factor of roughly 2.7 times,” he said. 

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In the end, the nationwide average price per MHz-POP across all categories in the auction was $0.942, which is roughly 4.3 times the $0.217 price per MHz-POP that spectrum sold for in the CBRS auction, according to Javid. 

“A key question that we will not know until after the assignment phase for this C-band auction is whether Verizon got its desired 100 MHz of A block spectrum, which is supposed to be cleared by December of this year,” Javid wrote, noting that the assignment phase typically takes about a month.

RELATED: Cowen estimates Verizon’s C-band spend at $35B

Given the size of total spend in this auction, it has to be the case that a few bidders bid far more than expected going into the auction, he said.

“With the A block grossing over $23 billion in gross proceeds, it is probably fair to guess that Verizon will spend north of $30 billion excluding clearing costs, even if it did not win all the A block,” Javid said. “I suspect that AT&T also spent significantly more than expected (maybe $20 billion excluding clearing costs). T-Mobile likely did as well (maybe $10 billion excluding clearing costs).”

But it’s the joint venture between Comcast and Charter that could have driven proceeds up in a big way, he added. “If these companies spent $20 (or even $15) billion in this auction, it will certainly be a show of confidence in their burgeoning wireless offerings,” he wrote.

Long journey to get here 

FCC Chairman Ajit Pai, who leaves the commission on January 20, wasn’t kidding when he said the historic auction came after the agency confronted a host of technical, legal, political and other challenges associated with the band.

Pai himself came under attack when questioned why the FCC would award foreign satellite companies with a “windfall” for vacating spectrum for which they never paid. For a long time, the C- Band Alliance argued that the satellite companies themselves should conduct a private auction of the spectrum, which ultimately didn't happen.

RELATED: Pai chooses public auction of C-band spectrum

“These results represent a strong endorsement by the private sector of the service rules and transition plan put in place by the FCC to quickly make the C-band a critical part of 5G rollout in the United States,” Pai said in a statement Friday. “And they vindicate the hard choices the FCC made during the C-band proceeding…  It would have been easy to delay. But we rightly pushed ahead and overcame every one of those obstacles.”

Winning bidders will get the opportunity to bid for frequency-specific licenses in the assignment phase of Auction 107; the FCC said it will soon release the date and time when bidding in that phase will commence.

“This record-breaking spectrum auction demonstrates the wireless industry’s commitment to leading the emerging 5G economy and underscores the importance of developing a robust pipeline of spectrum auctions,” said CTIA President and CEO Meredith Attwell Baker in a statement.