The FCC's AWS-3 spectrum auction has yielded a little more than $4.7 billion in bids through its first seven rounds over the opening two days of the auction. However, the bidding so far has been concentrated around a few blocks of spectrum.
Through the first seven rounds, the heaviest bidding was, unsurprisingly, on licenses for spectrum in the largest metropolitan markets in the country, including the New York City metropolitan area, Los Angeles, Chicago, Dallas and Washington, D.C.
According to the FCC, the highest provisional winning bid through seven rounds was $263 million for a 10x10 MHz license of paired AWS-3 spectrum in the J Block covering the New York City area. That block, which runs from 1770-1780 MHz and 2170-2180 MHz, received five new bids in the seventh round. Bids on J-Block licenses in various parts of the country made up five of the top 10 bids though the first seven rounds, which is also unsurprising, given carriers' desire for at least 10x10 MHz blocks of spectrum to deploy LTE services.
Bids on the H and I Blocks were also among the highest in terms of provisional winning bids. Those blocks are also paired spectrum, though they are smaller 5x5 MHz blocks. The H Block runs from 1760-1765 MHz and 2160-2615 MHz, and the I Block runs from 1765-177 MHz and 2165-2170 MHz.
Although 70 companies and entities are qualified to bid in the auction, most analysts expect Verizon Wireless (NYSE: VZ), AT&T Mobility (NYSE: T), T-Mobile US (NYSE:TMUS) and Dish Network (NASDAQ: DISH) to make up the bulk of the bidding. However, the bidding is confidential, so it's unclear which companies are making which bids. The FCC will disclose the identity of bidders after the auction is over.
In contrast to the paired spectrum, the unpaired uplink spectrum running from 1695-1710 MHz has drawn paltry bids thus far. That's likely because it is not only unpaired but for uplink operations, which in general are considered less valuable by carriers. One of the sub-bands consists of one unpaired 5 MHz block (1695-1700 MHz, known as the A1 Block) and one unpaired 10 MHz block (1700-1710 MHz, or the B1 block).
So far, the highest provisional winning bid for any of the unpaired uplink spectrum was just $44,000 in Peoria, Ill., for the A1 block in the first round of the auction.
Jefferies analysts looked at the bidding through the first seven rounds and assessed that the bids were drawing around 30 cents per MHz-POP for paired spectrum and just 5 cents per MHz-POP for unpaired spectrum. "Bidding is primarily occurring in the H and J paired blocks in urban markets at this point," Jefferies analysts Mike McCormack, Scott Goldman and Tudor Mustata wrote in a research note. "Aside from the larger 10x10 J Block, the H Block is key because it can be combined to create another 10x10 block with either of the G and I blocks."
Importantly, they added: "We expect that the auction prices will only approach comparable AWS/PCS prices after several dozen rounds."
Before the AWS-3 auction started, analysts speculated the paired spectrum would fetch anywhere from 75 cents to $1.50 per MHz-POP, and that the unpaired spectrum would go for $0.20 to $0.30 per MHz-POP.
It's unclear how long the AWS-3 auction will last, but if history is any guide it will likely be several weeks. The AWS-1 auction in 2006 went 161 rounds over 28 days. The FCC has set a total reserve price for the AWS-3 auction of $10.587 billion.
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Correction, Nov. 18, 2014: This article incorrectly identified the spectrum band of the AWS-3 J-Block. It runs from 1770-1780 MHz and from 2170-2180 MHz.