Auction 103 concludes second round with $715M in bids

The first day of bidding in the Federal Communication Commission’s (FCC) Auction 103 ended its second round with $715,333,400 in bids, possibly indicating a lighter appetite for the latest millimeter wave spectrum to come to market.

Auction 103, which includes the upper 37 GHz, 39 GHz, and 47 GHz bands, is the largest auction of millimeter wave spectrum the FCC has conducted. The 28 GHz auction ended earlier this year after 176 rounds of bidding spread across 38 days, generating a total of $702,572,410 in provisionally winning bids. Auction 102, which included a lot more markets across the country in the 24 GHz band, raised a total of $2,024,268,941.

After Round 1 in Auction 103, spectrum was selling for just $0.000931 per MHz-POP compared to $0.001606 per MHz-POP at the same point in Auction 102. “With 3400 MHz of spectrum available and just 35 bidders competing, it will be a struggle for Auction 103 to reach anywhere near the disappointing $0.009112 per MHz-POP that Auction 102 reached after 91 rounds,” wrote Sasha Javid, COO at the Spectrum Consortium, in a blog.

Similar to Auctions 101 and 102, Javid, who was the chief data officer and legal advisor for the FCC’s Incentive Auction Task Force in 2016, is tracking the latest auction on his website.

Auction 103 kicked off with two rounds of bidding on Tuesday, and it’s moving to three rounds on Wednesday. Javid said he suspects the FCC will stick with three rounds for a few more days but will increase the number of rounds per day much faster than in previous millimeter wave auctions.

“I think it’s safe to say they’re going to try to do this faster than the previous auctions,” he said, referring to the number of rounds per day. 

The FCC has the CBRS auction coming in June and there’s a desire to start the C-band auction before the end of 2020, so they likely want to keep things moving along as swiftly as possible.

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Expectations are probably modest for this auction compared to some non-millimeter wave auctions that have been done in the past. Not surprisingly, the 47 GHz band is seeing less action than the 37 and 39 GHz bands.

That said, “although making auction predictions can be difficult given the wide multitude of factors that come into play, I would be pleasantly surprised if Auction 103 crosses the $2 billion threshold,” Javid told FierceWireless.

While much of the U.S. wireless industry is clamoring for mid-band spectrum for 5G, the FCC insists that these airwaves will be critical in deploying 5G services and applications. The FCC is making a total of 3,400 MHz of spectrum available in Auction 103, and the major national carriers, as well as smaller entities, are all expected to participate to some degree or another.

“Auctioning the 39 GHz and upper 37 GHz bands together presents a critical opportunity for 5G deployment as it represents the largest amount of contiguous spectrum available in the millimeter-wave bands,” FCC Chairman Ajit Pai said in a statement. “Notably, we’re setting up the Upper 37 GHz, 39 GHz, and 47 GHz auction to be our second-ever incentive auction. This one will be different from the broadcast incentive auction that Congress authorized years ago, but it’ll have the same worthy goal: clearing or repacking existing licensees to make spectrum as useful as possible, boosting competition and benefiting consumers.”