FCC sets record with auction of key spectrum for 5G use
During 2021, U.S. carriers will take another huge step toward completing the build out of their 5G networks. According to TVTechnology, the FCC last week wrapped up an auction of mid-band spectrum in the C-band. These airwaves lie in the range of 3.7GHz-3.98GHz and heavy demand for the rare mid-band spectrum helped generate a record $80.9 billion in proceeds related to the auction. There were 57 bidders vying for a total of 5,684 licenses. Mid-band spectrum is very much in demand by U.S. carriers and T-Mobile has made these airwaves the key part of its layer cake approach to 5G. The previous record for money generated by an FCC auction for spectrum was the $44.9 billion generated by the FCC’s 2014 AWS-3 auction.
FCC auction of mid-band spectrum generates nearly $81 billion in winning bids
T-Mobile, the first U.S. carrier to launch nationwide 5G in the states, used its 600MHz low-band spectrum as the foundation for its nationwide 5G service. These signals travel great distances making them the perfect foundation for its network. But what they don't do is deliver download data speeds much faster than 4G LTE. High-band spectrum can only travel short distances making them perfect for urban areas where the population is densely packed. While these signals do not easily penetrate buildings, they do deliver fast 5G download data speeds often hitting 1Gbps and faster.
The FCC generated $80.9 billion in an auction for mid-band spectrum
In between the two extremes is mid-band spectrum. Sprint's mid-band holdings were exactly what T-Mobile was targeting when it offered $26.5 billion to buy its fellow wireless provider back in April 2018. The deal closed this past April giving T-Mobile control over Sprint's 2.5GHz mid-band spectrum. These signals travel further than those of the high-band variety and are faster than low-band 5G. Many analysts expect T-Mobile to become the fastest 5G provider in the states thanks to its mid-band holdings once all the work is done.
Other carriers wanted the opportunity to purchase mid-band spectrum for themselves. In November 2019, U.S. Cellular, Verizon, AT&T, Bluegrass Cellular, Pine Belt Wireless and the C-Band Alliance sent an electronic letter to the FCC requesting an auction of mid-band airwaves in the C-Band (3.7GHz-4.2GHz). At the time, U.S. Cellular President and CEO Ken Meyers says that it is "critical" for U.S. carriers to obtain as much mid-band spectrum as they can find. The executive made it clear that the FCC had to take action ASAP to make sure that there would be enough mid-band spectrum to go around.
FCC Chairman Ajit Pai, who is leaving the regulatory agency this Wednesday afternoon when the transition to the Biden administration takes place, said, "These results represent a strong endorsement by the private sector of the service rules and transition plan put in place by the FCC to quickly make the C-band a critical part of 5G rollout in the United States. And they vindicate the hard choices the FCC made during the C-band proceeding—and that we made them. The FCC confronted a host of technical, legal, practical, and political challenges in structuring this auction. It would have been easy to delay. But we rightly pushed ahead and overcame every one of those obstacles. As a result, we significantly advanced United States leadership in 5G and have enabled America’s wireless consumers to more quickly benefit from 5G services."
Satellite owners who are giving up their spectrum in the auction are being transitioned to the upper 4.0-4.2 GHz range. To prevent interference from the satellite transmissions to impact the wireless providers, a 20MHz band will be used as a "guard band."
The next step in the process requires the auction winners to bid for licenses related to specific frequencies. The FCC will release a notice to the public containing the date and time when this assignment phase will take place.