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Midband 5G spectrum auctions come to the fore

Midband has become the premier spectrum for 5G use. The FCC's 3.45 GHz auction began in October, following the massive C-band sell-off that ended in January 2021.

Midband 5G spectrum auctions are changing how mobile network operators roll out spectrum in the U.S.

The Federal Communications Commission (FCC) previously hosted three high-band millimeter wave (mmWave) auctions for 5G deployments in the U.S. High-band mmWave delivers fast 5G downloads at speeds up to 1 Gbps. But mmWave base stations offer a coverage range of around 1,000 feet and only deliver connectivity outdoors.

Now, the agency is concentrating on midband radio spectrum auctions to provide operators with more spectrum for 5G. Midband can cover greater ranges, while still delivering data downloads in the hundreds of megabits.

The auction for C-band, which ranges from 3.7 GHz to 4.2 GHz, was the first major sell-off of midband spectrum in the 5G era. The auction pulled in $80.9 billion for the radio waves before it closed on Jan. 15, 2021.

Auction 110

On Oct. 5, 2021, the FCC commenced the bidding in Auction 110, with spectrum ranging from 3.45 GHz to 3.55 GHz.

The sell-off amount had to reach an FCC-set reserve price of $14.8 billion; otherwise, bidders wouldn't receive any spectrum. Experts initially waited to see if Auction 110 would reach its reserve price.

"I think it's going to be a race to see if the $14.8 billion mark can be reached," said Brian Goemmer, president at AllNet Insights & Analytics, an authority on U.S. wireless spectrum ownership.

Analysts suspected that one major bidder, speculated to be Verizon, dropped out of the 3.45 GHz auction, raising concerns about how much money would be bid for the spectrum sell-off.

"If Verizon has dropped out, as rumored, AT&T, Dish and T-Mobile have less competition in the urban markets," Goemmer said. "I could see AT&T and Dish being happy with 40 MHz each and T-Mobile satisfied with 20 MHz."

However, the auction crossed the $15 billion mark on Oct. 20, relieving concerns about if it would reach its goal. As of Nov. 3, the sell-off had raised $21.6 billion in bids from 33 qualified bidders.

Spectrum limit

Goemmer said he doesn't believe the 3.45 GHz auction will be as consequential as the C-band auction earlier in 2021 because it doesn't present operators with as much spectrum as some previous sell-offs. The 3.45 GHz auction offers 100 MHz in 10 MHz blocks across the U.S., with a 40 MHz cap on the amount of spectrum that a single bidder can acquire.

"I don't think the 3.45 GHz spectrum is as significant as the C-band because the carriers are limited to 40 MHz, which is still a relatively small channel size for 5G, compared to T-Mobile's 160 MHz at 2.5 GHz," he said.

"I have AT&T and Dish as the carriers that have the biggest need for upper midband spectrum," Goemmer added. "AT&T needs it to close the gap with Verizon and T-Mobile, while Dish lacks any upper midband spectrum, which is the ideal coverage/capacity spectrum for 5G."

C-band ambitions

AT&T has already been vocal about how it intends to use the C-band spectrum it previously won in Auction 107. AT&T said it will deploy the first 40 MHz of the 80 MHz of C-band spectrum by the end of 2021. AT&T spent $23.4 billion on the C-band auction.

T-Mobile, meanwhile, spent $9.3 billion to grab an average of 40 MHz of C-band spectrum at the auction. The operator intends to combine C-band spectrum with its extensive 2.5 GHz holdings to further increase its 5G footprint nationwide.

Verizon was the biggest spender at the C-band sell-off. Putting up $52.9 billion -- including incentive payments and clearing costs -- for the midband bonanza, Verizon won between 140 MHz and 200 MHz of C-band spectrum in every available market.

Verizon has already started to install equipment for C-band deployment. The carrier expects to cover 100 million people in the U.S. with the spectrum by March 2022.

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