AT&T and Dish Network worry that a simultaneous multiple-round (SMR) bidding format for the upcoming 2.5GHz spectrum auction for 5G will give T-Mobile an unfair advantage. But Verizon disagrees.

Mike Dano, Editorial Director, 5G & Mobile Strategies

May 28, 2021

4 Min Read
2.5GHz auction fight pits AT&T and Dish against T-Mobile and Verizon

The 5G industry is preparing for yet another major spectrum auction. But unlike past auctions, this one will feature a clear protagonist: T-Mobile.

The FCC earlier this year voted to begin the process of auctioning the 2.5GHz spectrum licenses around the country that T-Mobile does not own. And based on some new filings to the agency, it appears that AT&T and Dish Network are teaming up for rules they believe will prevent T-Mobile from buying even more 2.5GHz spectrum.

Single rounds vs. simultaneous rounds

At issue is whether the FCC conducts an auction with a single bidding round format or one with a simultaneous multiple-round (SMR) bidding format. As explained by the FCC, the single-round format would involve winning bidders paying the amounts of their winning bids for the licenses they are awarded. The SMR auction format would offer every license for bid at the same time and consist of successive bidding rounds in which bidders may place bids on individual licenses. Under the SMR format, bidding would remain open on all licenses until bidding stops on every license.

"A single-round auction could help offset the competitive disadvantages that new entrants face in a band that is already dominated by an incumbent licensee, T-Mobile," Dish Network told the FCC. "T-Mobile is a nationwide service provider and the majority holder of 2.5GHz spectrum, and may be better positioned than other entities interested in Auction 108." (The 2.5GHz auction has been dubbed Auction 108 by the FCC.)

"Adopting an SMR format would be tantamount to handing virtually all of the 2.5GHz spectrum to T-Mobile at below-market prices," AT&T told the FCC.

T-Mobile, for its part, is urging the FCC to adopt the SMR format. The carrier said it would allow bidders to react to other bidders' bids.

Interestingly, Verizon supports T-Mobile's position.

"An SMR auction, as compared with a single-round auction, will create a more competitive auction that enables bidders of all sizes to have a fair shot at acquiring spectrum," Verizon told the FCC. "All bidders – small and large – will be disadvantaged in a single bidding round auction."

But AT&T and Dish disagree. For example, Dish told the FCC that a single-round format "will better enable regional providers and new entrants to participate, and will keep the auction time frame from becoming overly burdensome."

Ancient spectrum history

According to Summit Ridge Group, the 2.5GHz band – also called the Educational Broadband Services (EBS) and Broadband Radio Services (BRS) band – was allocated in 1963 for educational TV. As a result, it was assigned to various universities, high schools and churches around the country. A series of companies, including Nextel, Sprint and Clearwire, subleased more than half of the available 2.5GHz licenses across the country – mainly in urban areas – to create a vast trove of midband spectrum that T-Mobile agreed to acquire for $26 billion via its purchase of Sprint.

However, as noted by former FCC Chairman Ajit Pai, the remaining 2.5GHz licenses that are not owned by T-Mobile mostly sit unused due to the unusual licensing regime governing the band. The FCC voted early this year to change the licensing rules in the band to support an auction of the spectrum for 5G – now the agency is working on the rules for that auction. It's unclear how the agency might rule on the auction-format topic. It will likely issue final auction rules for the band later this year.

However, the agency's 2.5GHz auction will likely take a back seat to the FCC's 3.45GHz-3.55GHz auction that is scheduled to commence in October. There is more interest in the 3.45GHz-3.55GHz auction overall as it offers fully 100MHz of mostly unencumbered licenses all over the country, including in big cities where demand is high.

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

About the Author(s)

Mike Dano

Editorial Director, 5G & Mobile Strategies, Light Reading

Mike Dano is Light Reading's Editorial Director, 5G & Mobile Strategies. Mike can be reached at [email protected], @mikeddano or on LinkedIn.

Based in Denver, Mike has covered the wireless industry as a journalist for almost two decades, first at RCR Wireless News and then at FierceWireless and recalls once writing a story about the transition from black and white to color screens on cell phones.

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