- The FCC’s first spectrum auction in four years wrapped Tuesday after 72 rounds
- The auction raised more than $3.5 billion from the sale of 200 AWS-3 licenses
- The full list of auction winners is expected in the coming days
The Federal Communications Commission (FCC) concluded its first spectrum auction in four years, raising more than $3.5 billion through the sale of 200 AWS-3 licenses.
Actually, the grand total is $3,572,889,200 to be precise. Up to $3.3 billion of the proceeds will be used to reimburse operators that had to rip out Huawei or ZTE equipment as part of the FCC’s “rip and replace” mandate and other Commerce Department programs.
The auction started on June 2 and finished Tuesday after 72 rounds. The list of winners is expected to be released by the FCC in the next few business days. That’s when we’ll find out how big a role SpaceX played.
A total of 17 entities were qualified to bid in the auction, including the usual suspects: AT&T, T-Mobile and Verizon, plus EchoStar.
FCC: Auction bolsters competition
To hear FCC Chairman Brendan Carr tell it, the auction was a smashing success, beating expectations with significant per-unit prices.
“Today’s successful auction generated billions of dollars in competitive bids to put spectrum to effective commercial use, and it bolsters competition in the wireless marketplace,” Carr said in a statement. “We will carry this momentum forward as we prepare for the upper C-band auction in the year ahead.”
The licenses in Auction 113 are kind of a hodgepodge of markets, with New York, Chicago and Boston in the mix. The licenses are in the following bands: 1695–1710 MHz, 1755–1780 MHz and 2155–2180 MHz, collectively known as “AWS-3” bands.
Last week, the auction cleared the $2.9 billion mark, meaning EchoStar didn’t have to make up for a shortfall if proceeds were less than that. Most of the licenses are actually licenses that EchoStar subsidiary Dish won in Auction 97, which occurred more than 10 years ago.
Back then, Dish obtained the licenses through two designated entities, Northstar Wireless and SNR Wireless, which ultimately were deemed ineligible for DE bidding credits. The licenses eventually reverted back into the FCC’s hands.
New Street’s analysis
New Street Research analyst David Barden provided frequent updates on Auction 113. In his most recent summary Tuesday, he said the average price came out at $2.53/MHz-POP. Prices ranged from 15 cents/MHz POP for American Samoa to $5.67/MHz POP for Honolulu, Hawaii.
The two Chicago licenses breached the $4/MHz-POP mark, while the New York and Boston licenses were valued at $3.30/MHz-POP and $3.28/MHz-POP, respectively, he said.
The auction proceeds came in about 4% higher than what EchoStar/Dish paid in the original auction. Applying the same increase to the paired AWS-3 spectrum that EchoStar still holds, it could be valued at $8.1 billion or $2.94/MHz-POP, Barden said.
Earlier, New Street estimated the paired AWS-3 could be worth $8.3 billion or $3/MHz-POP. The results of Auction 113 further support that valuation, he said.
“If anything, investors may argue that it should be worth more as it’s a larger chunk of spectrum that may be more valuable in the hands of a strategic buyer,” he noted.