Despite Low Bids, First 5G Auction Called a Success
Despite relatively low bids in the first U.S. high-band spectrum auction ended Thursday (see 1901240034), it was a success, regulators and industry officials said. The next step is the start of the 24 GHz auction, which the FCC will announce this week. It plans an auction of the 37, 39 and 47 GHz bands later in the year. “This will allow Americans to see even faster, more competitive, & next-gen broadband services,” Commissioner Brendan Carr tweeted Friday.
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The winning bids on 24 GHz set the value at .0113 cent per MHz/POP, BTIG’s Walter Piecyk wrote investors. The auction didn’t offer more-densely populated areas and isn't "comparable to Verizon’s acquisition of Straight Path” valued at .0145 cent per MHz/POP, he said. Honolulu was the largest market, with bids of .0251 cent per MHz/POP, he said. The most expensive was Daggett, Utah, at .3244 cent per MHz/POP.
“There are always those who, no matter the result, wish to characterize the auction du jour as somehow disappointing,” blogged Free State Foundation President Randolph May. But he said it results "in U.S. wireless providers gaining access to needed high-band spectrum.”
Mercatus Center Senior Research Fellow Brent Skorup said auction staff has been working at the FCC during the shutdown, which may end soon (see 1901240016), but the closing of the FCC didn’t help. “It's an especially inopportune time for an auctions slowdown, with the completion of the 28 GHz auction and the 24 GHz auction pending,” he said. “Spectrum auctions have grossed about $100 billion for the U.S. government in the last 25 years but the benefits to U.S. consumers are even larger. ... Delays in spectrum assignment are costly and hopefully the FCC is operating at full strength soon.”
Since the FCC started such bidding in the 1990s, it cost only $1.7 billion to administer, said Tom Struble of the R Street Institute. “Even without any more appropriations from Congress, the FCC's auction proceeds could sustain it for years.” Struble noted FCC auction authority isn’t indefinite and will have to be revisited by Congress. Its 309(j) authority expires Sept. 30, 2022, except for spectrum identified in 2015's Spectrum Pipeline Act -- where its authority expires three years later, he said.