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19 January 2021

USA’s C-band auction breaks records with total bids of $80.9bn

By Wireless Watch Staff

The first phase of one of the most hotly watched spectrum auctions of the past year, the USA’s C-band auction, has ended, delivering gross proceeds of $80.91bn.

The huge sum dwarfs the total generated by the last record-breaking US auction in terms of fees paid, 2004’s AWS-3 sale, which netted almost $45bn. This reflects the shortage of midband spectrum available to US 5G deployers, which denied them the tactic adopted by operators in every other region – of using relatively high frequency spectrum in the 3.4-3.7 GHz range to add significant 5G capacity where required, while continuing to rely on 4G for coverage; but without having to take on the ecosystem and propagation challenges associated with even higher 5G bands such as 28 GHz.

The US operators had to choose between using those millimeter wave bands and restricting coverage severely (Verizon); using sub-GHz spectrum for broad coverage but with only ‘4G-plus’ performance (T-Mobile); or a mixture of the two (AT&T). The two leading operators desperation to get their hands on midband assets deepened when TMO acquired Sprint, the only one of the big four to have significant holdings in midrange bands (2.5 GHz).

The scene was set for high bids in the auction, especially with mobile challengers such as Dish Network and larger cablecos entering the race, and the USA has, once again, bucked the international trend for spectrum auction prices to fall, at least on a per-MHz/POP basis, amid increasing capacity and the emergence of lower cost shared options.

The C-band auction, or Auction 107, offered 280 MHz of spectrum in the 3.7-3.98 GHz band, which were auctioned in 5,684 location-based blocks. All blocks were sold. In the upcoming second phase, ‘assignment’, winning bidders haggle for specific licences and frequencies and after these are allocated, the winners’ identities will be made public.

Verizon is expected to be a big winner in the auction because it has the most urgent need to expand coverage in its 5G network and catch up with AT&T and TMO. It is currently relying on its 4G spectrum, and dynamic spectrum sharing (DSS) to extend its 5G reach, and also invested in licences in the 3.5 GHz CBRS band last year.

Other operators that registered to bid in Auction 107 were AT&T, TMO, Charter, Comcast, Cox, Altice USA, Columbia Capital, Dish Network, Viasat and US Cellular. Comcast and Charter, which are developing mobile platforms and services together, are expected to have bid jointly.

Other metrics of the auction include an overall price per-MHz/POP of $1.09 with clearing costs.