FCC Launches Fresh Mid-Band Spectrum Auction To Boost 5G

The US Federal Communications Commission (FCC) on Friday launched its latest auction of mid-band wireless spectrum to bolster 5G networks, as an analyst firm said the 2.5 GHz spectrum involved was likely to be mainly of interest to T-Mobile US.

Auction 108 is set to run through September or October and is the last for which the FCC has publicly announced plans.

The agency’s 5G spectrum activities have been slowed by a 2-2 deadlock between Republican and Democrat-appointed commissioners, and its formal authority for holding spectrum auctions expires in September.

Legislation for extending that authority is making its way through Congress, which is preparing for midterm elections in November.

2.5 GHz spectrum

T-Mobile is likely to be the main participant in the auction, according to industry watchers.

The company is the only major player building a 5G network using 2.5 GHz spectrum, meaning most other operators would have to deploy new equipment to make use of any licences they might acquire.

Verizon, AT&T and satellite television company Dish Network have all registered to bid in the auction, but have spent large sums in previous auctions, with AT&T spending $9.1 billion (£7.5bn) on licences for 3.45 GHz mid-band spectrum in January and Dish spending $7.3bn at the same auction. T-Mobile spent $2.9bn on the 3.45 GHz licences.

Rural wireless

Last year Verizon paid $52bn for 3,511 C-Band spectrum licences, with AT&T spending $23.4bn and T-Mobile $9.3bn for those licences.

The new round is to auction off about 8,000 county-based licences mostly scattered around rural parts of the US.

FCC chair Jessica Rosenworcel noted that “there are gaps in 5G coverage, especially in rural America” and highlighted the auction as “a unique opportunity to fill them in”.

However the scattered locations of the licences further limits their desireability for major operators.

Wireless broadband

As a result analysts New Street Research said it was expecting bids of only $1.4bn at the low end, ranging up to only $5bn at the high end.

Smaller telecoms operators such as Carolina West Wireless, Cellular South Wireless, Copper Valley Wireless, Granite Wireless, Nex-Tech Wireless, Nsight and Union Telephone Company have registered to participate, but cable companies and investment firms have both bowed out, New Street noted.

“T-Mobile’s hottest competition for these licences could actually come from small WISPs (wireless Internet service providers) who could use a specific licence,” New Street said in a research note, adding that “few of those operators have the resources to compete with T-Mobile”.

Next steps

FCC commissioner Brendan Carr said in March the FCC should expand spectrum use and consider auctioning other spectrum including the “lower 3 GHz band and several additional spectrum bands”.

However, the spectrum from 3.1 GHz to 3.4 GHz is currently controlled by the US military, which has shown little interest in making it available for 5G.