FCC mmWave auction brings in more than $7.5B as clock phase ends

The clock phase of the FCC’s third millimeter wave 5G spectrum auction wrapped up Thursday, bringing in more than $7.5 billion.

Gross proceeds in Auction 103 totaled $7,561,724,774, following 104 rounds of bidding.

During the clock phase, participants scooped up all but two of the available 14,144 licenses for spectrum in the 37 GHz, 39 GHz, and 47 GHz bands. In total, the FCC offered up 3,400 megahertz of 5G spectrum.

According to analysis by Sasha Javid, who is COO of the Spectrum Consortium and former chief data officer and legal advisor for the FCC’s Incentive Auction Task Force, at the end of the clock phase the nationwide price per MHz-POP across both MN and P blocks ended at “a respectable” $0.007110, or 78% of where Auction 102 (which offered 24 GHz licenses) landed on a per MHz-POP basis.

Auction 103 Price per MHz
(Image provided by Sasha Javid)

Javid has been tracking the auction action on his website and results show that major markets brought in the highest cumulative proceeds, including New York City ($947 million), Los Angeles ($740 million), and Chicago ($356 million).  Interestingly, he noted the highest price per MHz-POP after round 104 was for the MN block in Valentine, Nebraska, which came in at $0.118684 and was the only product that garnered more than 10 cents per MHz-POP.

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Some, including Javid, had been wary that demand at the FCC’s most recent 5G spectrum auction might be tempered since the agency already made a large amount of millimeter wave spectrum available during Auctions 101 and 102, and U.S. operators are still waiting for it to free up additional crucial mid-band spectrum.

“I am sure the FCC is breathing a sigh of relief that demand proved so robust given that the time to run this auction may have delayed the much anticipated mid-band auctions,” wrote Javid, referring to action on CBRS and the C-Band.

As for Auction 103, the nationwide price per MHz-POP for category MN blocks (37.6-38.6 GHz and 38.6-40 GHz) was $0.009613 at the end of the clock phase, which is 5.5% higher than the closing price per MHz POP in the FCC’s earlier 24 GHz auction, according to the analysis. 

Competition for the blocks in the 47 GHz band wasn’t as fierce, and prices for P blocks were roughly 89% cheaper than MN, he noted. The nationwide price per MHz-POP for category P blocks ended at $0.001099.

“We expected that the MN blocks would go for more money because of their superior propagation characteristics and the fact that many of the largest bidders were incumbents in the 39 GHz blocks, and therefore eligible to receive bidding credits applied against winning bids,” wrote Javid. “Nevertheless, the magnitude was a larger than I expected.”

RELATED: mmWave auction poised to resume, on path to $6B

Earlier in the auction many partial economic areas (PEAs) didn’t have a bid for 47 GHz, which Brian Goemmer, president of AllNet Insights & Analytics, had said could relate “to the challenges in deploying mmWave spectrum outside of urban centers and the limited appetite in rural areas has already been met with the 24, 28, and 37-39 GHz bands."

However, bidding picked up in later rounds after the FCC implemented a rule change, according to Javid, with the number of unsold 47 GHz blocks shrinking from 704 to a mere five after Round 69. Only two blocks remained unsold at the end of Round 104. 

“Once the FCC changed the activity requirement to 100%, it appears that many bidders decided to use their excess bidding eligibility to pick up P blocks on the cheap nationwide,” wrote Javid.

There is still the assignment phase to go, during which winning bidders can bid for specific frequencies. The assignment round isn’t expected to generate a significant amount of additional proceeds, Javid said, though left a small 37 GHz-related caveat.

“If there is some competition in the assignment round, it might be because blocks in the 37 GHz band will require coordination [with] federal government users,” he wrote.