White House and DOD Announce Additional Mid-Band Spectrum Available for 5G

The White House and Department of Defense announced today that 100 megahertz (MHz) of contiguous mid-band spectrum, in the 3450-3550 MHz band, will be available for 5G by the end of the summer.

DOD worked closely with the Services, as part of America’s Mid-Band Initiative Team (AMBIT), and leveraged technical work performed by the National Telecommunications and Information Administration (NTIA) to devise a spectrum sharing framework that supports industry’s need for additional mid-band spectrum while protecting critical national security requirements.

“With this additional 100 MHz, the U.S. now has a contiguous 530 megahertz of mid-band spectrum from 3450-3980 MHz to enable higher capacity 5G networks,” said Honorable Dana Deasy, DOD Chief Information Officer in remarks to media.

The Federal Communications Commission will auction the spectrum after service rules are adopted.

DoD is proud of the success of the AMBIT and is committed to working closely with industry after the FCC auction to ensure timely access to the band while protecting national security.

This article originally came from DOD.

Comments from Excellent Analysis Man:

To dig into some of the details:

This is 100MHz from 3.45GHz-3.55GHz.

CBRS being auctioned now is 150MHz from 3.55GHz-3.7GHz.

C-Band which will be auctioned soon is 280MHz from 3.7GHz to 3.98GHz.

I think it’s very likely that Verizon will try to bid strong for new spectrum. However, given previous auctions, it seems unlikely that Verizon would be able to get half of what will be available. AT&T, T-Mobile, Dish, and many others will likely bid on spectrum. While we might discount Dish, they were 32% of the 600MHz auction bidding. Comcast was 9% of the 600MHz auction. Speculators were 15%. Verizon will surely want spectrum, but they might also be satisfied with 100-150MHz depending on the pricing involved.

It’s important to remember that over-spending on spectrum means not having the resources to deploy your network. While spectrum is very important, you can also boost capacity by creating more cells. The CBRS auction has 70MHz up for sale and they’re expecting bidding to reach $4B if not $10B. It’s already at $2.6B. It’s also important to remember that every marginal MHz is going to cost more than your average because you’re having to outbid others who are competing for it. You might be able to get 100MHz of 500MHz for $7B, but might end up paying $35B to get 250MHz because you have to outbid more people. You have 2.5x the spectrum, but you’ve paid 5x more because you made the bidding more competitive. Auctions aren’t something with a set price and the higher percentage that you want to purchase, the more you’re going to pay per unit.

$7B might get you enough 5G spectrum. $35B might get you double that, but that’s possibly near half a decade’s worth of network spend.

That’s what makes it unlikely for anyone to approach half in a competitive field. T-Mobile took home 40% in the 600MHz auction, but a big part of that was the fact that Verizon and AT&T didn’t really compete. The 3.5GHz auctions seem to have a lot of interest and competition as people realize how important it’ll be for 5G. Dish has an insatiable appetite for spectrum, AT&T realistically needs more spectrum too as their 168MHz won’t cut it if T-Mobile and Verizon have so much more, T-Mobile will probably want to grab some more and won’t mind driving the price up a bit, and there will be a litany of other competitors too.

I think Verizon will likely settle for around 150MHz, maybe 200MHz. But 200MHz is 40% and I think it will be extremely expensive to hit 40% in competitive auctions like these. I mean, if Dish grabs 100MHz (20%) and Comcast goes for another 50MHz, you’re down to 70% left. AT&T should probably want at least 100MHz to get to 270MHz (close to T-Mobile’s 300MHz) so that eliminates another 20% and we’re down to 50% (250MHz) left. Speculators will likely want 50MHz if not 100. So, we’re down to 150-200MHz and T-Mobile isn’t buying anything yet. T-Mobile could grab 50-100MHz, Dish would likely buy more if the price were low, AT&T could up their purchase a bit. 150MHz would mean winning 30% in a very crowded field.

And it’s not just about whether AT&T or T-Mobile need the spectrum. T-Mobile could go after 50-100MHz to try and keep their lead and keep that spectrum out of Verizon’s hands. Every MHz that T-Mobile buys that doesn’t land in Verizon’s hands is basically 2MHz worth of lead over Verizon. And T-Mobile wants to become a home internet provider and they have a good start with the 2.5GHz spectrum, but another 100MHz of mid-band spectrum would really help boost that effort.

I think Verizon will settle for 150MHz lest they drive up the price too high. But who knows, maybe AT&T won’t be interested. Maybe Dish will decided that they don’t want spectrum despite this being the first auction where they’re actually a wireless carrier. However, all that seems less likely. It seems more likely that 150MHz will give Verizon what it needs to deploy a mid-band 5G network and they’ll concentrate on their time-tested formula of deploying a first-class network.

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