3.45 GHz auction surpasses $1.5B, loses one large bidder


Bids in the 3.45 GHz auction surpassed $1.5 billion at the close of Friday’s rounds, and it appears one large bidder has dropped out.

Since starting on Tuesday there have been 11 rounds, together generating around $1.57 billion. Auction 110 is pausing for a long weekend and resuming Tuesday, October 12, with four rounds scheduled.

Sasha Javid, COO of BitPath and former Chief Data Officer and legal advisor for the FCC Incentive Auction Task Force, closely tracks results and interactive maps can be found here.

RELATED: 3.45 GHz auction kicks off, $672M in Day 1 proceeds

Javid noted that it looks like one large bidder dropped out after round 10. 

“Fortunately, that change did not trigger other bidders to drop out of the biggest markets in round 11 because that would cause some worries for the FCC heading into the long weekend,” he wrote in an email of auction results.

While there’s been much speculation about who might bid what, identities of winning bidders won’t be known until the FCC releases official results after Auction 110 wraps up.

Below is a graph provided by Javid that shows a steep drop in excess demand (yellow line) at round 10 and a map showing changes in PEA demand for the round. The 3.45 GHz band is licensed in ten 10-megahertz blocks in each partial economic area (PEA), with a total of 4,060 licenses.

Auction 110 round 10 graph Sasha Javid
(Source: Sasha Javid, BitPath)
Auction 110 demand map
(Auction 110 PEA Demand Change in Round 10. Credit: Sasha Javid, BitPath)

 

AT&T, T-Mobile, Verizon and Dish Network are all participating in the mid-band spectrum auction, though some analysts previously speculated Verizon or T-Mobile might drop out.

While one large bidder dropping out doesn’t seem to have caused a ripple effect yet, there were concerns ahead of the October 5 start that if T-Mobile and Verizon both drop out or don’t bid to win, the auction would ultimately be in jeopardy of not meeting its reserve price of $14.77 billion.

RELATED: U.S. midband spectrum 3.45 GHz auction just around the corner

There’s 100-megahertz available at 3.45-3.55 GHz, but auction rules put a 40-megahertz limit on the amount any winner can acquire.

AT&T is largely expected to buy a full 40-megahertz (with estimates from $9 billion to $12 billion). And while there are 33 qualified bidders, without at least one other major player vying alongside AT&T, analysts at New Street had worried remaining bidders wouldn’t be able to commit enough money needed to make up the difference and meet that minimum auction revenue threshold.

Javid doesn’t think the FCC should worry just yet, saying there are still on average 4.5 bidders vying for spectrum in the top 20 markets – assuming each bidding for four blocks (or the maximum 40-megahertz).

However, Javid said, assuming those bidding in the top 20 markets are responsible for contributing the lion’s share (70%) of the reserve price “we are still looking at a roughly 9.3X increase in gross proceeds that bidders in these markets need to come up with.”

“So it will start to get a little dicey if another bidder drops in these Top 20 markets, particularly if bidders in the rest of the markets don’t fulfill the remaining 30%,” Javid told Fierce.  

RELATED: What’s in the cards for the 3.45 GHz auction?

Mid-band spectrum in 3.45 GHz band falls in what’s often seen as a sweet spot for a mix of 5G coverage and capacity, but licensees in some areas also have coordination requirements with the DoD for federal military users that will need to keep using the band in certain locations or at certain times.

After a dozen rounds in the FCC C-band auction (with 280-megahertz available in the 3.7 GHz range), bids neared $5 billion. The first phase of blockbuster auction ultimately concluded after 97 rounds at a whopping $80.9 billion.



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