Spectrum is the lifeblood of the wireless industry, and it's required for any 5G network. Thus, it's incredibly valuable – consider the collective $100 billion that Verizon, AT&T and T-Mobile are spending on acquiring midband C-band spectrum licenses and network equipment.

However, shortly after the C-band auction ended, the FCC announced that it plans to hold another 5G spectrum auction just seven months from now. It plans to auction off 100MHz of prime midband spectrum between 3.45GHz and 3.55GHz.

And some of those licenses that it will put up for grabs will be available for commercial use sooner than the C-band licenses that the FCC just finished auctioning.

There's just one catch: Operators like AT&T and Verizon are now buried under billions of dollars of debt as they attempt to pay for the C-band licenses they already purchased. Meaning, they might not have much financial firepower left to bid for the spectrum the FCC plans to auction in October.

As a result, some analysts believe companies like Comcast, Charter Communications and Charlie Ergen's Dish Network – companies largely locked out of the C-band auction – might be able to swoop in and grab a massive chunk of valuable 5G midband spectrum for a song.

"The major bidders will leave the C-band auction with $81 billion more in net debt than they had at the start (and they will still have to come up with another $14 billion in clearing costs)," wrote the financial analysts at New Street Research in a recent note to investors. "Most will not have reduced leverage much, if at all, by the start of the 3.45–3.55GHz auction. Unless financial buyers with deep pockets step in, this could result in a relative bargain for those with balance sheet capacity to bid. We suspect Dish and cable [companies] may have held back on C-band licenses in favor of 3.45–3.55GHz."

'Another one of Charlie Ergen's stupid bluffs'

Dish Network was a heavy bidder in the FCC's C-band auction, which ended in February. The company placed a number of nine-figure bids on C-band licenses around the country. However, AT&T and Verizon ultimately outbid Dish in every single market except Cheyenne, Wyoming.

That's why it was noteworthy when, just weeks after the end of the C-band auction, Dish began petitioning the FCC to develop new rules for 5G operations in midband spectrum. The efforts signaled Dish's interest in the 3.45–3.55GHz band as well as its desire to raise the value of its 3.5GHz CBRS midband spectrum holdings. Dish spent $913 million in the FCC's CBRS auction last year to purchase 5,492 licenses, and is asking the FCC to treat the CBRS band the same as the 3.45–3.55GHz band.

It's that kind of finagling that has earned Ergen the ire of most of the rest of the wireless industry. For example, during a 2019 antitrust trial involving T-Mobile, Deutsche Telekom's Timotheus Höttges testified that rumors of an Amazon-Dish pairing were simply "another one of Charlie Ergen's stupid bluffs."

Of course, there's also the distinct possibility that other companies will challenge Dish in bidding for the 3.45–3.55GHz band. Chief among those would be T-Mobile, which only spent around $10 billion on C-band licenses in order to maintain its lead in midband 5G spectrum ownership. Comcast and Charter also could bid in the auction, though their desire for spectrum may not match that of Dish, considering Comcast and Charter did not place one bid in the C-band auction.

3.45–3.55GHz caveats

To be clear, the 3.45–3.55GHz band isn't a panacea. The band is currently heavily used by the US military, primarily for Navy radar systems. And the NTIA – the US government agency in charge of federal spectrum usage – recently estimated it will cost around $13.4 billion to move those military systems into other spectrum bands. That price will likely need to be paid by bidders before they can get their hands on any 3.45–3.55GHz licenses.

Further, the US military has carved out dozens of Cooperative Planning Areas (CPAs) and Periodic Use Areas (PUAs) where soldiers will still be using the 3.45–3.55GHz band well into the future. These areas include Camp Pendleton in California, the Joint Readiness Training Center in Louisiana, Camp Lejeune in North Carolina and White Sands Missile Range in New Mexico. Companies that win licenses in these locations will need to share them with soldiers when the Defense Department needs them.

However, according to the analysts at New Street Research, most of the 100MHz between 3.45–3.55GHz outside of the CPAs and PUAs will be ready for commercial 5G operations by the end of this year. That's a much different situation than the 280MHz in the C-band – only 100MHz of C-band spectrum will be available by the end of this year; the remainder won't be available until 2023.

The equipment conundrum

Finally, there remains the question of whether phones, network equipment and other gadgets will support the 3.45–3.55GHz band.

Some of the world's biggest equipment suppliers promised that they would be able to meet their customers' needs.

"Samsung has multiple radios in the 3.45-3.55GHz band," the company wrote in response to questions from Light Reading. "Samsung has successfully delivered its Massive MIMO solutions supporting this band in the world's leading markets including Japan and Korea. The 3.45-3.55GHz band falls within the 3GPP n77/n78 spectrum bands that are in use for midband 5G service in markets around the world."

Similarly, Ericsson said that its product portfolio "will fully support the 3.45-3.55GHz 5G midband range."

And Nokia told Light Reading that "Nokia will have products available for our customers when required."

However, there are clear indications that C-band spectrum winners will not be able to leverage their C-band equipment for the 3.45–3.55GHz band. That's noteworthy considering the C-band sits at 3.7-3.98GHz, very close to the 3.45–3.55GHz band.

"Our current C-band products support only the 3.7-3.98GHz spectrum range, which was auctioned," Ericsson said.

"When the performance requirements of the 3.45-3.55GHz band are finalized, we plan to make changes on our portfolio to offer suitable solutions for US operators," Samsung explained.

Qualcomm – one of the world's largest suppliers of 5G silicon for phones – did not respond to Light Reading questions about its plans to support the 3.45GHz and 3.55GHz band.

This equipment situation could create challenges for C-band spectrum owners hoping to purchase 3.45GHz and 3.55GHz licenses. After all, Verizon plans to upgrade around 8,000 towers with C-band equipment by the beginning of next year, just as the 3.45GHz and 3.55GHz auction should be ending. If Verizon purchases substantial 3.45GHz and 3.55GHz licenses, it would have to upgrade all those towers all over again.

Dish, meantime, might be able to handle its midband spectrum buildout all at once if it were to upgrade its towers with both CBRS and 3.45GHz and 3.55GHz licenses. After all, Dish's Dave Mayo recently confirmed to Light Reading that the company's initial 5G radios will only support its AWS-4, lower 700MHz E block and AWS H block spectrum licenses, and not its recent CBRS spectrum winnings.

There's no telling whether Dish will participate in the 3.45GHz and 3.55GHz auction. After all, the auction will happen at almost the same time Dish is scheduled to switch on its planned 5G network. But it's a safe bet that Dish's Ergen is carefully considering his next "stupid bluff."

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— Mike Dano, Editorial Director, 5G & Mobile Strategies, Light Reading | @mikeddano