Cable may miss America's next big 5G spectrum auction

It appears that the cable industry has little interest in acquiring more spectrum for 5G.

The FCC on Wednesday released a list of bidding entities interested in participating in its next spectrum auction for 5G, the 3.45GHz-3.55GHz auction. The auction, dubbed Auction 110 by the FCC, is scheduled to start in October.

AT&T, T-Mobile, Verizon and Dish Network appear to be among the 42 different entities that registered interested in participating in the auction, based on ownership information contained in FCC filings related to the auction.

However, Comcast, Charter Communications, Altice USA and Cox Communications – the nation's four largest cable providers – do not appear to be on the list of companies that registered for the event. Representatives from both Charter and Comcast confirmed to Light Reading that the companies do not plan to participate in the auction. Representatives from other major cable companies in the US did not immediately respond to questions from Light Reading about their intentions.

"It appears that cable has not signed up to bid," noted the financial analysts with New Street Research in a note to investors Wednesday, following the release of the FCC's list.

Cable's disinterest in spectrum

The absence of major cable providers in the upcoming 3.45GHz-3.55GHz spectrum auction is noteworthy considering a number of cable companies purchased millions of dollars of spectrum in the FCC's 3.5GHz CBRS spectrum auction last year. Moreover, several major cable companies registered to bid in the FCC's massive C-band spectrum auction that ended earlier this year. However, no major cable companies placed bids during that event.

Some cable companies are using their spectrum holdings to build concentrated, small-scale 5G networks. For example, Charter said it plans to switch on a mobile network using its CBRS spectrum in some markets as early as this year.

Charter, Comcast and Altice USA all offer mobile services through MVNO relationships with mobile network operators. Such offerings essentially piggyback on existing mobile networks. However, by constructing its own mobile network with its own spectrum, Charter is poised to reduce its MVNO expenses by offloading a portion of its mobile customers' traffic onto its own network.

By failing to register for the FCC's 3.45-3.55GHz auction, Charter and other cable companies appear content to rely heavily on their respective MVNO agreements rather than constructing their own mobile networks. Charter and Comcast have MVNO deals with Verizon, while Altice has an MVNO deal with T-Mobile. Cox has signaled its interest in launching mobile services, but has not yet done so.

3.45GHz-3.55GHz auction for the incumbents

Thus, it appears the upcoming 3.45-3.55GHz auction may be dominated by familiar names like Verizon and AT&T. After all, Verizon and AT&T walked away with the bulk of spectrum available in the recent C-band auction.

However, the 3.45GHz-3.55GHz auction likely won't raise as much money as the C-band auction, which generated $81 billion in winning bids. The 3.45GHz-3.55GHz auction will only make around 100MHz available to bidders, whereas the C-band auction offered a total of 280MHz across the country.

Nonetheless, the 3.45GHz-3.55GHz auction is important considering it will release valuable midband spectrum for 5G. Such spectrum is viewed as ideal for 5G technology because it can support large geographic areas as well as speedy connections.

A number of other companies appear poised to bid in the 3.45GHz-3.55GHz auction alongside AT&T, Verizon, T-Mobile and Dish. Based on ownership documents filed with the FCC for the auction, it appears that Grain Management and Columbia Capital – two private equity firms that have participated in other spectrum auctions – may also participate in the 3.45GHz-3.55GHz auction. Wireline Internet company Frontier Communications also appears prepared to bid.

And several wireless Internet service providers also appear positioned to bid in the event, including Resound Networks and Watch Communications.

Other companies that appear to have filed to participate in the auction include smaller, regional wireless network operators like Nsight, VTel, Nex-Tech Wireless and Union Wireless. Several other smaller telecom providers also appear to plan to participate, including LICT Corp., Strata Networks and Agri-Valley Communications.

Some of the applications for the 3.45GHz-3.55GHz auction were deemed incomplete by the FCC, but those companies will have a chance to fix their applications before the auction starts.

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