After 11 rounds Thursday (July 30), the FCC's CBRS auction had drawn $$723,243,566 in gross proceeds.

That was up from $675,158,287 in round 10, $632,051,948 in round nine and an increase of more than $200 million million over round six's $519,155,888 total on Monday (July 27).

The auction, the FCC's first-ever flexible-license mid-band auction, began with a single, six-hour, round; moved to two, two-hour rounds, for the succeeding two days, and on Wednesday shifted to three, hour-and-a-half rounds until further notice, which is at least through Thursday, according to the FCC's web site.

The FCC is auctioning 70 MHz worth of county-based Priority Access Licenses (PALs) (a whopping 22,631 of them) in the 3550-3650 MHz 93.5 GHz) band. It is the most-ever flexible-use licenses available in a single auction, the FCC said. Each license will be a 10 MHz unpaired channel. There are 271 qualified bidders.

The band is being shared by federal and non-federal users, with incumbents--Navy radar, for example--having the top priority, followed by PALs and then general authorized users (GAAs). 

Sasha Javid, COO of BitPath and former top FCC auction official, said that a couple of the key questions the auction should answer is how much Verizon, AT&T and T-Mobile-Sprint is willing to pay for spectrum that requires frequency coordination and "strict" power limits and whether Charter and Comcast (or Dish) will "take the plunge" and bid "in a meaningful way."

On July 23, 221 companies began bidding on 22,631 available provisional access licenses (PALs) in the 3.5 GHz band in the FCC’s auction for CBRS spectrum.

When it’s all said and done, the CBRS PAL Auction 105 will be one of the largest and most ambitious spectrum auctions in U.S. history, with Verizon, T-Mobile, AT&T, Charter, Comcast, Dish Network, Cable One, CenturyLink, Cincinnati Bell, Frontier, Mediacom, U.S. Cellular and Windstream among the U.S. “wireless internet service providers’ vying for a piece of what has been dubbed, the “innovation band.”

In addition to all the top U.S. mobile and cable operators, who are interested in mid-band spectrum for 5G applications, a broad range constituency including everything from energy and utility companies to industrial manufacturers to universities will be on hand, attempting to further a vast chasm of other CBRS aims.

The first round of bidding wrapped up Thursday. Gross Auction 105 round 1 proceeds totaled $357,344,200. Many more rounds of bidding are expected in the weeks ahead.

Federated Wireless has been on the forefront of developing commercial applications in the 150 MHz section of spectrum existing in the 3.5 Ghz band known as Citizens Broadband Radio Service (CBRS).

To better understand the CBRS PAL auction and its importance, we conducted an email chat with Iyad Tarazi, the former Sprint and Nextel executive who serves as co-founder and CEO of Arlington, Virginia-based Federated Wireless.

MCN: What are some key differences of the PAL auction versus traditional licensed frequency auctions in the past?

Iyad Tarazi: By design, the FCC structured the auction so that it would be similar to previous auctions, using an ascending clock auction format, and applying common forms, deadlines and payments for the application and bidding process. Given the intrinsic nature of the CBRS band, however, there are some notable differences to this auction, including:

The auction covers a total of 22,631 PALs nationwide—the largest number of spectrum licenses ever made available for bidding in a single auction.

PAL license holders won’t be assigned channels as in a normal auction. Rather, licensees will be dynamically assigned a specific channel by a frequency coordinator.

The rules allow bidders to bid for no more than four generic blocks of spectrum per county. The spectrum aggregation limit of 40 megahertz will ensure the availability of PALs for at least two users in the counties where there is the greatest likelihood of high demand for such spectrum.

For the first time in an FCC spectrum auction, it incorporates an activity upper limit to mitigate the possibility of a bidder losing eligibility.

The auction applies bidding credit caps of $25 million for small businesses and $10 million for rural service providers, as well as a $10 million cap on the overall amount of bidding credits that a small business bidder may apply to winning licenses in smaller markets.

MCN: How will the licenses be carved up and awarded.

IT: Industry analysts are predicting that auction proceeds could total around $4.4 billion.

The FCC rules state that the geographic license size is county-based. The auction will offer up to seven PALs in each county-based license area, for a total of 22,631 PALs nationwide.

The auction permits bidding on a county-by-county basis and allows any one bidder to bid for no more than four generic blocks (40 MHz) of spectrum per county. Each PAL will consist of a 10-megahertz unpaired channel in the 3.55-3.65 GHz band, dynamically assigned by the Spectrum Access System (not static).

The spectrum aggregation limit of 40 megahertz is designed to ensure the availability of PALs for at least two PAL users in the counties where there is the greatest likelihood of high demand for CBRS spectrum. This aggregation limit will also apply to spectrum acquired through the secondary market (such as leasing).

MCN: How long will the auction take to complete?

IT: Our best guess is that the auction will take roughly two months to successfully complete all rounds of bidding.

Under the clock auction format, the auction will proceed in a series of rounds, with bidding being conducted simultaneously for all spectrum blocks in all counties available in the auction. During each bidding round, the bidding system will announce a per-block clock price in each county. The bidding rounds will continue until, for all counties, the total number of blocks that bidders demand does not exceed the supply of available blocks. At that point, those bidders indicating demand for a block at the final price will be deemed winning bidders.

MCN: What about the secondary PAL market?

IT: The FCC’s rules require PAL holders to demonstrate substantial service before the end of their initial 10-year license term. For the first time, the FCC’s rules dictate that spectrum isn’t reserved for the licensee’s exclusive use. Rather, any frequencies designated for priority access that are not in use by a Priority Access Licensee may be utilized by General Authorized Access (GAA) users.

I expect that a secondary market for PAL licenses will develop as PAL winners build out their networks and find areas of excess capacity. The rules allow the license holder to lease this excess capacity to other users.

MCN: Once the auction occurs, how fast will PAL spectrum be implemented?

IT: After full certification was announced in January, the growth curve became a hockey stick. PAL bidders are either already deploying CBRS equipment using GAA, or they have fully tested the gear in their labs and field trials and have deployment plans in place for PAL. The day the FCC issues the PAL licenses, the data will be plugged into the Spectrum Access System (SAS) in order to manage the spectrum according to the three-tiered CBRS rules. For these reasons we don’t expect to see a delay between PAL auction completion and start of deployment.