First FCC Auction of 5G Broadband Licenses Ends With $702.6 Million in Bids

After 38 days of activity and 176 rounds, the FCC’s auction of upper microwave flexible use service (UMFUS) licenses in the 27.5-28.35 GHz (i.e., 28 GHz) band ended yesterday with a gross winning bid tally of nearly $702.6 million posted on 2,965 licenses. Touted as the FCC’s first sale of wireless broadband spectrum designated for fifth-generation (5G) use, the auction of UMFUS millimeter wave licenses in the 28 GHz band was relatively small compared to previous events (such as the 2015 Advanced Wireless Service-3 auction and the broadcast incentive auction) which garnered tens of billions of dollars in proceeds for the FCC and the U.S. Treasury.

Consisting of two 425 MHz blocks of spectrum at 27.5-27.925 GHz and 27.925- 28.35 GHz, the 28 GHz licenses span the geographic area of counties representing about half of the counties in the U.S. and cover mostly rural areas. In all, 3,072 licenses were available for sale, leaving 107 without bids at the conclusion of the auction. The FCC’s soon-to-be-launched auction of UMFUS licenses in the 24 GHz (24.25–24.45 and 24.75–25.25 GHz) band is expected to attract higher bids as those licenses will cover larger and more densely populated Partial Economic Areas (PEAs).

Forty bidders, including United States Cellular Corp., DISH Network (participating under the name of Crestone Wireless) and three of the four national U.S. wireless carriers—AT&T, Verizon and T-Mobile US—competed in the 28 GHz auction. The top provisionally-winning bids included paired licenses covering Dane, Wisconsin ($12.5 million and $11.4 million) and Honolulu, Hawaii ($10.3 million and $10 million). In accordance with its previously-stated policy for Auctions 101 and 102, the FCC will not disclose the identity of winning bidders for the 28 GHz auction and for the upcoming 24 GHz auction until after the 24 GHz auction is completed. Fifty seven bidders, including the aforementioned entities plus cable network operator Cox Communications, have qualified to participate in the 24 GHz auction. Next week, the FCC is expected to issue a public notice announcing the upfront payment deadline and start date of the 24 GHz auction (Auction 102). The agency will also issue a public notice next week outlining payment and long form application deadlines for winning bidders in the 28 GHz auction (Auction 101). 

Because personnel charged with running the FCC’s auction program are paid through proceeds and not through appropriations, the FCC is able to continue its authorized auction activities for the duration of the ongoing partial government shutdown. As he applauded the successful conclusion of the 28 GHz auction as “a significant step toward maintaining American leadership in 5G,” FCC Chairman Ajit Pai pledged that “our 24 GHz auction will begin soon, and . . . we’ll ensure that American consumers reap the substantial benefits that will come from the next generation of wireless connectivity.”