Experts Expect High Bids in 3.45 GHz Auction Despite Information Concerns
Industry experts said the 3.45 GHz auction, to start Oct. 5, is likely to be a success, with AT&T and Dish Network in particular seen as keen to pick up more mid-band spectrum. But questions remain about the level of data provided by the government. Upfront payments, the first expression of bidder interest, are due July 21 (see 2106090078). The reserve price for federal agencies to clear the spectrum and for the auction to close is $15 billion.
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CTIA and major carriers asked FCC, NTIA and DOD officials asked last month for more complete information on DOD exclusion zones before the start of the auction (see 2106140046). CTIA officials spoke with Wireless Bureau and Office of Economics and Analytics staff this week about the rules. The auction's success “rests in significant part on timely information being made available regarding federal government encumbrances, coordination, and available auction products, as well as the ability for industry and DoD to discuss in detail the technical operating parameters and coordination framework, including information that may not be made public due to its potential sensitivity,” said a filing not yet posted in docket 19-348. The group noted DOD is scheduled to offer more information at a July 12 workshop. The FCC declined comment.
T-Mobile raised concerns in a filing posted Thursday, following a call with an aide to acting FCC Chairwoman Jessica Rosenworcel. T-Mobile “appreciates the information released to date and the planned DoD workshops, [but] the information is not yet sufficient,” the carrier said: “T-Mobile urges the Commission to continue to work with DoD to make more information available regarding the type and locations of DoD use of the 3.45 GHz band.” The FCC should clarify DOD can continue to make that information available “in publicly accessible formats” even after short-form applications are filed, starting the quiet period on the auction, T-Mobile said.
“While the information released to date from NTIA and DOD has been vague on what is required for coordination by winning bidders, and the number of licenses that are impacted under these coordination procedures are perhaps bigger than anticipated, I still expect the 3.45 GHz auction to be a success,” said Sasha Javid, BitPath chief operating officer. Verizon and T-Mobile “certainly do not need this spectrum, and therefore may only participate in a limited way given these additional requirements,” he said. AT&T and Dish are looking for mid-band spectrum “at prices which should be significantly cheaper than C-band, even with the nearly $15 billion reserve price artificially driving up proceeds in this auction,” he said.
“There will be demand regardless given the importance of mid-band spectrum; the issue is price,” said Summit Ridge Group’s Armand Musey. “When you aren’t sure what you are buying, it’s hard to justify paying top dollar,” he said. The $94 billion C-band auction “set the logical upper limit” for the auction while the $4.59 billion citizens broadband radio service auction “sets a lower limit,” he said.
“Operators are ready to buy that spectrum and I won't be surprised if prices get high,” emailed John Strand of Strand Consult: “Among operators globally, there is a hunger for more spectrum.” Strand said access to many different bands make it possible to build “more intelligent networks.” Financing is also relatively cheap and more spectrum allows carriers to “optimize their” capital expense, he said.
Recon Analytics analyst Roger Entner expects a big auction. “T-Mobile, Verizon and AT&T have enough balance sheet room to be active bidders,” and “Dish will probably also be active,” he said.