Making more spectrum available for the commercial marketplace is, according to Federal Communications Commission (FCC) chairman Ajit Pai, “a central plank of the Commission’s 5G FAST (opens in new tab) strategy”.
And the ongoing FCC auction for 3.5GHz spectrum – known as Auction 105 (opens in new tab) – is currently offering 22,631 Priority Access Licenses (PALs) in the 3550-3650 MHz band, with seven PALs being offered in each county-based license area.
(The 3.5 GHz band has been earmarked as prime spectrum for 5G services in the US, because it offers a sweet spot between capacity and speed, with the potential to provide a big chunk of contiguous spectrum that will support channels with wide bandwidth.)
According to Wiley Rein LLP, which has been monitoring the auction, after 31 bidding rounds over a period of 12 days, gross revenues have reached $2.576 billion, surpassing the revenues in Auction 102 (24 GHz). But the aggregate bidding – which highlights demand – is at $3.898 billion, 51% more than the gross proceeds.
“It is unusual at this stage of an auction to have such a large difference in aggregate bidding, which reflects the demand from the bidders, and gross proceeds, which represents the amount of supply that is available to meet the bidders’ demands,” read a statement issued by Wiley Rein LLP.
Thanks to the way spectrum has been allocated, across different counties in the US, auction 105 has included an impressive 22,631 licenses, with the likes of local companies, rural service providers and universities bidding alongside national network operators.
This will come as good news for the FCC, which has been criticised in the past for its handling of spectrum auctions.
“Fixing past policy errors, we’re now set to allow auction magic to efficiently allocate 70 megahertz per county for innovative wireless services, making 3.5 GHz the first new 5G mid-band spectrum in the US,” said FCC Commissioner Mike O’Rielly when bidding began.
The FCC is currently scheduling three rounds of bidding per week day, and increasing the bid prices in competitive markets by 10% per round.
“As prices continue to rise, we expect to continue to see bidders reduce their bids in high priced markets more quickly and, perhaps, shift some demand to less expensive markets,” said a Wiley Rein LLP representative. “Eventually, this will lead to a narrowing of the aggregate excess and a slowing of the growth in gross proceeds and overall average bid prices.”
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