2.5 GHz auction raises $100 million in first day

The Federal Communications Commission’s auction of 2.5 GHz midband spectrum raised more than $103 million in its first day of bidding.

The auction kicked off with a single, six-hour bidding period. Two two-hour rounds of bidding are scheduled for Monday.

Only 168 of the available licenses had no bids during the first round. Most of the licenses—4,395, to be exact—had a single bidder in the first round. A total of 3,454 licenses had multiple bidders.

Since this is an auction of overlay licenses with limited utility in the major metro areas, this auction may have a different dynamic than the typical auction flow, in which densely populated urban areas get bid up rapidly until bidders drop out and the major metro prices settle first, with bidding then shifting to mid-sized markets and finally to rural ones.

In the first day of bidding in Auction 108, the licenses with the most demand were in Cache County, Utah, with a population of less than 113,000 people and a first-round price of $30,000. Six bidders put up bids. Meanwhile, licenses that cover Los Angeles County, Cook County (IL) and Harris County (TX) with $1 million or $2 million-plus price tags, saw no bids, or one.

Places like Sweetwater County, WY; Shawano and Grant counties in Wisconsin and Franklin County in Washington State were among the areas where licenses received five bids during the first round.

There are approximately 8,000 county-level licenses up for grabs, with the best actual spectrum utility in rural areas because of encumbrances in the spectrum in urban areas. The 2.5 GHz (2.496-2.690 GHz) spectrum available in this auction is being sold as overlay licenses, as a result of FCC action in the past few years to reform the use of the band, which used to be known as the Educational Broadband Service (EBS) band. The former Sprint, in particular, had built up extensive leasing arrangements across the country with educational institutions who held EBS licenses. T-Mobile US acquired Sprint’s 2.5 GHz spectrum when it bought the rival carrier and has relied heavily on that midband spectrum deployment for its 5G services. This auction gives the operator the chance to buy still more 2.5 GHz spectrum as it continues to emphasize its pursuit of customers in smaller and rural areas.

There are three channels available, according to the FCC band plan: Channel 1, which is 49.5 megahertz of spectrum; Channel 2 is adjacent to Channel 1 and consists of 50.5 megahertz of spectrum. There is also a smaller channel, Channel 3, which consists of 17.5 megahertz and is not adjacent to either of the other two channels. Channels 1 and 2 seem to be receiving more interest than Channel 3 — for instance, in Cache County, UT, there were six bids each for Channels 1 and 2 but only three bids for Channel 3.

The auction will use an ascending clock format auction. The FCC has put together a new mapping tool so that would-be bidders can find out whether there are unassigned 2.5 GHz licenses in areas they are considering.

There is a field of 82 qualified bidders, including the three national wireless network operators, US Cellular and Dish Wireless, bidding under the name Carbonate Wireless.

There are also a significant number of small and medium-sized telecom network operators set to participate in the auction, including Carolina West Wireless, Cellular South Wireless, Copper Valley Wireless, Granite Wireless, Nex-Tech Wireless, NSight, Puerto Rico Telephone Company, Redzone Wireless and Union Telephone Company.

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