5G and Beyond

Andromeda auction for midband 5G ends with $21.9B in bids

The FCC's latest auction of midband spectrum for 5G ended Tuesday with a total of $21.9 billion in winning bids.

That total is roughly in line with pre-auction estimates.

However, the event isn't over yet. Next up is the auction's "assignment" phase, wherein winning bidders can select the specific frequencies they want. After that phase is over, the FCC will then announce the identities of the winning bidders. That might not happen until December or, potentially, January.

Major participants in the auction included AT&T, Verizon, T-Mobile, Dish Network, Grain Management and Columbia Capital. After all, the spectrum up for grabs in the Andromeda auction is ideal for 5G. However, winning bidders will need to purchase new radio equipment from the likes of Ericsson and Nokia to put their spectrum licenses into commercial operation.

Unlike past spectrum auctions, cable companies including Comcast and Charter Communications did not participate in the Andromeda auction. And, based on Dish's recent fundraising, the company appears poised to potentially account for as much as a fourth of the Andromeda auction's total.

Broadly, the FCC's Andromeda auction of spectrum licenses between 3.45GHz and 3.55GHz – dubbed Auction 110 by the FCC – can be considered a success. The auction started October 5, and bidding crossed the critical $14.8 billion reserve price October 20. That was a necessary milestone considering that reserve price is the cost to move existing, incumbent military users out of the band.

The auction, dubbed the "Andromeda auction" by Light Reading because it sounds cool, clocked in at around $0.70 per MHz-POP. The per MHz-POP calculation is applied to most spectrum transactions and reflects the number of people covered compared with the amount of spectrum available, though it can be affected by a wide variety of factors.

In comparison, the recent CBRS auction of midband spectrum drew winning bids of just $0.215 per MHz-POP, whereas the massive C-band auction generated winning bids of $0.945 per MHz-POP, a figure that does not account for additional clearing costs.

The FCC's Andromeda auction is the agency's third-biggest spectrum auction ever. As noted by Next TV, only the $45 billion AWS-3 auction in 2015 and the $81 billion C-band auction earlier this year generated more in winning bids. The Andromeda auction earlier this month passed the FCC's broadcast incentive auction of 600MHz licenses, which ended with $19.8 billion in winning bids in 2017.

The value of the spectrum licenses in the Andromeda auction could rise if interference concerns continue to drag on the C-band.

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

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