Competitors are still bidding over who wins a single license in Guam
Guam is turning out to be an unexpected gem for the 2.5 GHz auction, with competition for licenses there drawing out the final rounds of the most recent of the U.S. midband spectrum auction and raising the most in gross proceeds.
After 72 rounds, the auction has raised $427.4 million, with the last vestiges of action consisting of bidding in Guam.
This auction does not have an assignment phase; according to the Federal Communications’ rules for the auction, once bidding rounds stop because all the desired licenses have one (or no) bidder asking for them at a specific price, that bidder is the winner.
As of Round 70, there was only a single license in Guam still seeing competition, and that continued in rounds 71 and 72 today.
Licenses in this auction are being provided on a county-level basis, with nearly 8,000 available (three per county). According to auction analysis by Sasha Javid, COO of Bitpath and former chief data officer and legal advisor on the Federal Communications Commission’s Incentive Auction Task Force, who tracks FCC auction activity on his blog, the tiny U.S. territory of Guam, with a population estimated at less than 160,000, will end up with license gross proceeds of more than $32 million (as of Round 72)—with those three licenses accounting for more than 7% of the total auction proceeds. Comparatively, the licenses covering Los Angeles County, which usually end up being some of the most expensive in a given spectrum auction, will generate gross proceeds of about $6.7 million.
At the other end of the spectrum (so to speak), the FCC says that 145 license products have no demand from the field of 82 bidders. That figure held steady for the last few rounds.
The 2.5 GHz auction began on July 29. The auction raised about $100 million in bids on its first day and has seen uneven traction since then, with slow periods followed by a pick-up in bidding each time the FCC has increased the number of rounds. Last Friday, the agency kicked up the number of daily rounds to six, which pushed the auction to conclusion in short order.
This auction wasn’t expected to be a blockbuster on the order of the C-Band auction, given that many of the spectrum licenses on offer are encumbered, particularly in urban areas that typically drive big bids by the national carriers. However, it is by far the smallest-grossing of the midband auctions. The CBRS Priority Access License auction raised around $4.5 billion; the C-Band raised a record-smashing $81 billion in bids and the most recent 3.45-3.55 GHz auction raised a more-than-respectable $22.5 billion in bids.
With the auction wrapping up, that also erases the possibility that the auction might last long enough to exceed the FCC’s current legislative authority to hold spectrum auctions, which expires at the end of September and has yet to be reauthorized by Congress.
The greatest utility for the current 2.5 GHz licenses is expected to be in rural areas—indeed, FCC Chairwoman Jessica Rosenworcel talked up the auction specifically as one that would help to make inroads on the digital divide by providing an opportunity to “fill in some of the critical 5G gaps in rural America.” In addition, T-Mobile US has a huge head start on holdings in this band and deployment of 5G using 2.5 GHz spectrum acquired via its purchase of Sprint; plus, this auction comes last in a series of midband auctions (CBRS Priority Access Licenses, C-Band and 3.45-3.55 GHz) that have already drawn billions of dollars of carrier investment, particularly the C-Band auction.
The 2.5 GHz auction drew 82 qualified bidders, including the three national wireless network operators, US Cellular and Dish Wireless, bidding under the name Carbonate Wireless. There were also a significant number of small and medium-sized telecom network operators in the field, 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.
Those small bidders are most common in the middle of the country, where activity was consistently elevated and where prices per-MHz-POP ended up the highest. But those smaller buyers don’t drive big bid totals for the auction in the way that the C-Band, driven by huge spending by Verizon and AT&T, saw a total of more than $81 billion in bids that smashed previous auction records. (For previous analysis on the auction action, read this story.)