CBRS 3.5 GHz auction concludes, raising $4.58B

The FCC hasn’t yet released the names of the winning bidders, but on Tuesday it concluded its auction of Priority Access Licenses (PALs) in the 3.5 GHz band, with gross proceeds raising $4,585,663,345 after 76 rounds.

Known as the Citizens Broadband Radio Service (CBRS) band in the U.S., the 3.5 GHz PALs auction offered the first auction of mid-band spectrum for wireless carriers’ 5G services. CBRS spectrum also is expected to greatly increase the number of private networks in the U.S., and expectations are high for a healthy secondary market as PAL licensees seek to lease their spectrum to other entities.

The CBRS auction was unique in a number of ways, including the fact that many qualified bidders included non-traditional auction participants thanks in part to the smaller size of the licenses. Utilities, rural service providers, universities and others joined wireless and cable service providers in bidding. 

Auction 105 also offered up the most licenses – 22,631 – ever auctioned in a single event. The total 70 megahertz of licensed spectrum was offered on a county basis across 3,233 areas, each with seven 10-megahertz blocks available. 

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FCC Chairman Ajit Pai called the auction a resounding success. “The strong demand for licenses was the direct result of this Commission’s reforms to the rules for the 3.5 GHz band—reforms that would not have been possible without the leadership and hard work of my colleague, Commissioner Mike O’Rielly,” Pai said in a statement. “This auction has been a key part of our 5G FAST Plan and our ongoing push to make more mid-band spectrum available for 5G.”

The FCC said it will release a public notice in a few days providing detailed auction results, including the names of winning bidders and deadlines for payments and the filing of long-form applications.

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Some industry analysts had predicted the CBRS auction gross proceeds would amount to $4.4 billion at $0.20 per MHz-POP. On the high end of the range, investment analysts at Raymond James thought gross proceeds could top out on the order of $8 billion to $10 billion.

Ultimately, the price per MHz-POP was $0.217 on all blocks sold in the auction. Sasha Javid, COO of BitPath who has been providing a play-by-play of the auction action, called it an impressive amount for a spectrum band that will require winners to limit power levels and to share the band with government incumbents, namely the U.S. Navy.

But even more impressive were some of the prices for individual counties, he said. Among the 20 largest counties, Orange County led the way at $0.912 per MHz-POP, followed by Cook County (Chicago) at $0.767 and San Diego at $0.685. New York finished at a robust $0.627 and Los Angeles finished at $0.530, he noted.

Given that Los Angeles County was the largest county by far, it also generated the most gross proceeds at $364,503,167, according to Javid, who was chief data officer and legal advisor for the FCC’s Incentive Auction Task Force in 2016.

Javid wrote that his favorite tidbit of this auction was that Loving, Texas, with  a population of 82 people, generated gross proceeds of $812,000 and price per MHz-POP of $141.463. That’s a function of how opening prices were set but likely also some possible parking early in the auction, he noted.

The results of Auction 105 bid well for the C-band auction, which is scheduled to start December 8. Because the 280 MHz of C-band spectrum that will be up for grabs doesn’t have the same power limitations as the CBRS band, prices could easily be double, resulting in a $38 billion auction or more, according to Javid. Short-form applications for bidding in the C-band auction are due by September 22, when the quiet period starts.