The Federal Communications Commission's 3.45-GHz midband spectrum auction is practicing some trickle-up economics, with the initial flood of dollars — up by more than $1 billion dollars per round in the initial stages as bidders vied for spectrum in top markets — now only a trickle, ticking up by only a few million dollars per round for the past several days.
After round 134, there were only 27 spectrum “products” — out of a total of 481 — with demand greater than supply. When that number hits zero, the auction will close, even if there isn’t a winning bidder for all of the product. That’s because the reserve price of $14.775 billion, which is 110% of the cost of relocating incumbents, was met long ago.
Currently there are 446 products with demand equal to supply. Midband spectrum is generally considered the sweet spot for 5G wireless services, due to its propagation characteristics.
Ten days ago, the FCC tried to goose the process by increasing the number of rounds from five to seven and decreasing the time per round from a half-hour to 20 minutes.
Also: Revved-Up FCC 3.45-GHz Spectrum Auction Gets In Gear
The aggregate bid total stands at $21,871,582,294, up only a little more than $3 million from round 133’s $21,868,132,284, with the clock phase of the auction likely nearing its close. There will then be an assignment phase, in which winning bidders can vie for specific frequencies. They will get contiguous spectrum blocks regardless of whether they participate in that follow-on auction.
“Bidders are continuing to focus their excess demand in mid to small PEAs [partial economic areas] where prices are relatively low,” said law firm Wiley’s auction-watching team several rounds ago. “Because the competition is focused on small markets, average bid prices are increasing extremely slowly and are most likely near their final values.”
The auction began Oct. 5 with 33 bidders, including AT&T, Verizon Communications and T-Mobile. Cable broadband operators had argued that the way the auction was structured — specifically the license sizes — would discourage them from bidding.
But whenever it closes, the auction will be at least the third-highest-grossing FCC auction in history behind the C-band and AWS-3 (advanced wireless services) auctions.
