CBRS

Verizon, seeking to close mid-band holes in its network, was the big winner in the citizens broadband radio service auction with $1.89 billion in bids, the FCC said Wednesday. Wetterhorn Wireless, a Dish Network subsidiary, bid $912,939,410. Charter Communications’ Spectrum Wireless Holdings bid $464,251,209.

The FCC ended the citizens broadband radio service auction after the final bidding round Tuesday, with total bids of $4.585 billion, or just more than 21 cents MHz/POP. The auction offered the largest number of spectrum licenses ever in a single FCC auction and was the first FCC mid-band auction for 5G. Questions remain about who drove up the bids in the auction and the amount bid by wireless carriers, cable operators, Dish Network or companies planning to offer private networks. The next big mid-band auction of C-band spectrum starts Dec. 8.

The citizens broadband radio service auction hit close to $4.59 billion after 76 rounds Tuesday, with bidding slowing and no increase over Monday. Tuesday was the first with five bidding rounds. BitPath calculates the average price at just under 22 cents MHz/POP.

MoffettNathanson’s Craig Moffett said wireless industry trends all tie back to a charging T-Mobile. “Whether it is Verizon buying spectrum, or the Cable operators attempting to reduce costs in order to (eventually) lower price, everyone is chasing T-Mobile,” Moffett told investors Wednesday: “Only three months into the merger, it is already becoming clear that T-Mobile is poised to pull away from an otherwise uninspiring wireless sector.” Moffett said cable operators, eager to cut their costs, are likely among the biggest bidders in the citizens broadband radio service auction. Based on numbers from BitPath, prices are as high as 91 cents MHz/POP in Orange, California, and 68 cents in San Diego, he said. “Cable needs CBRS to bring their costs down, particularly if they are to eventually have the ability to price competitively versus T-Mobile,” he said: “Verizon wants CBRS to augment their LTE network.”

The citizens broadband radio service auction bids continue to climb, hitting a net $4.3 billion after four rounds Monday. The auction first hit $1 billion Aug. 3, climbing to $3 billion Aug. 11. New Street said in a Friday note when prices in large urban areas like New York and Los Angeles were close to 50 cents MHz/POP, “demand fell sharply as bidders pulled out of those markets. Many of those bids were then parked in counties where supply exceeded demand, creating a rotation of bids that drove up gross proceeds while leaving aggregate bids little changed.” Four more rounds are scheduled Tuesday.

The C-band auction will likely generate $52 billion in proceeds, the citizens broadband radio service auction another $3 billion, with Verizon likely the biggest buyer of spectrum, followed by AT&T, T-Mobile, Dish Network and then cable operators and others, New Street Research's Jonathan Chaplin emailed investors Tuesday. The wireless carriers need as much C-band spectrum as they can get, but cable's needs are more modest due to its ubiquitous high-capacity fixed infrastructure, and 20 MHz-40 MHz of CBRS spectrum would constitute auction success, he said.

The citizens broadband radio service auction proceeds were at almost $2.6 billion Friday, after 31 rounds. That's a price of 12.5 cents per MHz/POP. New Street’s Jonathan Chaplin told investors Friday the auction is off to a “very strong start,” likely due to bidding by Dish Network. “It always sucks for the carriers when Dish shows up for a spectrum auction,” he said. “The last time this happened prices went through the roof,” he said, citing the AWS-3 auction. New Street forecasts Dish will spend $6 billion, mostly on the C-band auction, but also on CBRS licenses. “We wouldn’t be at all surprised to see them spend more; it will all come down to whether they can find the funding,” Chaplin said.

The FCC’s citizens broadband radio service auction (see 2008030064) hit $1.8 billion Wednesday after 25 rounds. That translates to 9 cents MHz/POP nationwide.

Relatively low bidding so far in the citizens broadband radio service auction is in line with expectations and has no negative implications for the December C-band auction, observers told us. The auction hit $1.28 billion at the end of 19 rounds Monday, which translates to 6 cents per MHz/POP nationwide. FCC officials on Monday said bidding is about as expected at this stage.

The citizens broadband radio service auction will likely close at between the $2 billion raised in the 24 GHz auction and the $4.5 billion from the 37, 39 and 47 GHz band sale, New Street’s Jonathan Chaplin told investors. Wednesday's prices indicate an average of 4 cents MHz/POP, Chaplin said. “There is still lots of excess demand, suggesting that prices have a ways to run before we have a clear sense of where they will land.” The two previous auctions “saw prices start to stabilize around the 20th round,” he said: “We would expect the same here.” The FCC is now running three rounds a day and round 20 will come Tuesday, he noted. The auction hit $831.8 million Thursday after 13 rounds as bidding heated up. That's a jump from $775.2 million in the previous round.