U.S. FCC Auction Frees Up Mid-Band Spectrum for 5G

Article By : John Walko

Verizon spent big in the latest FCC auction, along with Dish and Comcast. AT&T sat this one out, apparently waiting for the next auction.

Verizon was by far the biggest spender in the FCC’s latest auction of spectrum, which focused on the highly-coveted 3.5GHz “mid-band” part of the airwaves. The total raised in Auction 105 was $4.59 billion; Verizon accounted for $1.9 billion of the total.

There were some surprising outcomes, not least that three of the top five spenders were cable companies eager to enter the mainstream mobile communications sector. They were Charter, Comcast and Cox Communications.

In second place, and less surprisingly, came Dish Networks, the ambitious group that has been busy building out its promised nationwide mobile network  intended to cover 70 percent of the population by 2023, and which would offer at least 35 Mbps.

It spent $912.9 million acquiring 5,492 licenses in total.  Over the past decade the company has amassed huge amounts of valuable spectrum.

FCC auction
Dish Network placed bids through Wetterhorn Wireless. SAL Spectrum is owned by communications services provider Atlantic Tele-Network, Inc., now known as ATN. AMG Technology owns the ISP Nextlink. XF Wireless is Comcast. “PAL” stands for priority access license. (Source: FCC)

The cable companies have long been keen to lessen their reliance on MVNO partners, such as Verizon, as they build out their wireless networks in their cable footprints using a variety of spectrum assets.

The outcome of Auction 105 was, of course, greatly affected by the fact that AT&T declined to participate in the auction, despite being one of the main flag-carriers that have been pushing the FCC to release significant portion of the mid-band airwaves.

Most likely AT&T, as well as arch-rival T-Mobile, is budgeting on spending big in the next big auction, due to kick off in December. This will target 280 MHz in the C-band for CBRS services. This auction could raise even more, given the licenses up for grabs will not come with the strict limitations for shared Federal and non-Federal deployments that came with the just concluded auction.

T-Mobile did participate in the 3.5GHz mid- band auction, winning just 8 licenses for a modest $5.6 million, but of course it already owns significant mid-band licenses, courtesy of its acquisition of Sprint Communications

Mid-band airwaves, which have been dubbed the “goldilocks” of the spectrum sector, are hugely important for the efficient roll-out of 5G-capable networks. Indeed, ready access to and deployment of this band is generally accepted to be the prime reason why predominantly Asian countries are ahead of US and most European countries in embracing the technology.

The mid- band waves enable large volumes of data and video to transmit at very high speeds and over long distances.

Part of the problem has been that, according to the big US network operators, the Administration, and mostly the Department of Defense (DoD), has been “hogging” the 3.5 GHz spectrum for its own use.

But earlier this year, the DoD agreed to a new spectrum-sharing concordat that would allow sensitive defense radar and communications services to share this valuable spectrum with the private sector in strictly defined ways.

In a statement by Dana Deasy,  the DoD’s  chief information officer, the newly formed America’s Mid-Band Initiative (AMBIT), worked out on an ’unprecedented’ 15-week schedule, “will make 100MHz of contiguous mid-band spectrum in the 3450 to 3550 MHz band.”

Deasy added the new rules mean the spectrum “will be available for commercial use without limits, while simultaneously minimizing impact on DoD operations.”

The DoD worked closely with the National Telecommunications and Information Association (NTIA) to come up with the spectrum sharing framework, Deasy stressed.

The initiative closely followed an in-depth study and report by Analysis Mason  commissioned by the NTIA that highlighted that the US urgently needed to double the availability of mid-band spectrum if it were to keep pace with 5G deployment with countries such as China, Japan and South Korea.

Some of the more surprising winners in Auction 105 were the many utility companies such as Sempra Energy,  South California Edison and Alabama Power, several smaller cable companies such as Mediacom and Cable One, and a large real estate business called JBG SMITH.

The outcome also begs an interesting question:  will Dish and the new entrants , mainly the cable companies, opt to use traditional mobile network suppliers, such as Nokia, Ericsson and Cisco,  or embrace the emerging, but so far untested open RAN route.

Dish has already embraced the open RAN option and has been involved in trials, but to date has stuck with the traditional approach, albeit with gear from Fujitsu. The cable companies have a big call — go with the status quo or give the smaller companies a chance and mix and match their equipment from less expensive suppliers, but potentially incur large integration costs.

As of now, FCC rules do not allow them to discuss such plans.

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