The FCC's auction for licenses in the shared Citizens Broadband Radio Services (CBRS) band surpassed the $1 billion mark last week, with high demand not isolated to only large market counties.
On Monday, after 19 rounds Auction 105 had garnered around $1.28 billion in gross proceeds for Priority Access Licenses (PALs). Demand still outpaced supply in 635 of the total 3,233 county license areas.
“This would be a great outcome given that these blocks require sharing with incumbent users and have strict power limitations,” Javid wrote.
Estimates for how much the auction for PALs in the 3.5 GHz band will ultimately raise have varied, with ranges from $3 billion to as high as $10 billion. There are 271 qualified bidders vying for the flexible use PALs and the auction has gained attention from more than just traditional players. The three-tier sharing set-up gives PALs priority over General Authorized Access (GAA) users in the band, which is shared with first priority federal incumbents.
Based on past auctions, high demand could be poised to start falling steeply at this point, Javid noted but wrote that the risk of maintaining demand is mitigated “because getting stuck in county-sized licenses is less risky than PEA-sized licenses.”
In recent auctions like the FCC’s third millimeter wave 5G spectrum auction, blocks were licensed based on larger Partial Economic Area (PEAs) geographic areas. The county-sized licenses (22,631 available in all) are likely part of increased interest from and eligibility for bidders like utilities and rural service providers, among others.
At the end of bidding Monday, demand for Los Angeles remained the highest at 28 blocks compared to a supply of seven. Javid’s auction tracking data shows the top 20 counties based on excess demand all had at demand of at least 11 blocks over the available supply.
While Los Angeles is one of the top counties population-wise, after Friday demand was still high across rural counties in the Midwest and West Texas. Javid’s auction result maps showed numerous counties in those areas still in green, which indicates continued demand.
“Given how widespread the green is in those areas this long into the auction, I suspect that there may indeed be some real interest to use the CBRS band to provide service in those areas,” Javid wrote.
Mid-band spectrum is a coveted resource, and Auction 105 is offering up 70 MHz for PALs. In December, the FCC is scheduled to start the C-band auction, offering 280 MHz of mid-band spectrum for 5G.
While carriers are expected to participate aggressively in the C-band auction, CBRS is also seen as an opportunity for private wireless networks, rural providers, and cable companies among other uses.
“The CBRS auction is not about how much the spectrum is worth,” New Street Research analyst Blair Levin wrote in a note to investors in July. “It’s about whether there are new disruptive business models for niche services.