FCC kicks off latest 5G spectrum auction

The auction, Auction 108, will offer 8,017 county-based licences in the 2.5 GHz band for areas where this spectrum is currently unassigned, primarily rural areas. 

 

“We all know there are gaps in 5G coverage, especially in rural America, and this auction is a unique opportunity to fill them in,” said FCC Chairwoman Jessica Rosenworcel. “I am grateful to the teams that have worked so hard to both stand up this auction and ensure the success of our efforts to make these airwaves available to Tribes to support wireless service in their communities.”

 

Earlier this month, the FCC announced that 82 bidders had qualified to participate in the auction, including all three of the country’s largest operators – AT&T, T-Mobile, and Verizon – as well as newcomer Dish Network. 

 

But despite this widespread interest in the auction, analysts predict that it will not be fiery affair, with most suggesting that T-Mobile will walk away with the lion’s share of the licences. This is because 2.5 GHz is the mainstay of T-Mobile’s 5G network rollout, unlike AT&T and Verizon which have focussed on other bands and would thus need to deploy different equipment to provide services with 2.5 GHz spectrum.

 

It is also worth noting that all of the largest US telcos have already emptied their pockets in previous spectrum auctions; last year, Verizon spent $52 billion acquiring spectrum in the 3.7–4.2 GHz band, while AT&T spend $23.4 billion, and T-Mobile $9.3 billion. The $80 billion auction hugely exceeded expectations, with analysts initially predicting that the operators would spend around $30–45 billion in total.

 

Their appetite was only slightly damped a year later, when, in January 2022, the FCC launched an 3.45 GHz band spectrum auction, which saw AT&T spend $9.1 billion, Dish $7.3 billion, and T-Mobile $2.9 billion. 

 

As a results, analysts only suggest that this latest auction – the last that the FCC has scheduled – will only raise between $1.4 billion and $5 billion, with Verizon and AT&T likely to invest relatively little and while T-Mobile easily outbids the smaller, regional telcos that also want a block of the 2.5 GHz band.

 

The auction is expected to continue until late September to early October, depending on bidding interest.