The C-Band Spectrum Auction: Retrospective and Prospective ObservationsMay 2021
Topics: Wireless Communications, Signal Processing, Economic and Cost Analysis
“Going once, going twice, sold!” The C-band auction set a record as the highest grossing auction of electromagnetic spectrum ever. It may have also been the highest revenue-generating auction of any kind ever.
The Federal Communication Commission (FCC) conducted Auction 107 for 280 megahertz (MHz) of electromagnetic spectrum in the C-band, specifically 3.7–3.98 gigahertz (GHz). The initial clock auction results of the C-band auction exceeded all expectations, reaching $80.9 billion, which was about 170 percent higher than prevailing a priori industry projections. On top of this result, bidders will pay an additional $9.7 billion in accelerated clearing payments, $3.3 billion in relocation costs, and $0.3 billion in premiums resulting from the assignment phase of the auction. These results indicate that spectrum supporting mobile networks will continue to hold value.
The C-band auction concluded on February 17, 2021, with highest bids from the three major U.S. mobile network operators (MNOs)—Verizon ($45.4 billion for 3,511 licenses), AT&T ($23.4 billion for 1,621 licenses), and T-Mobile ($9.3 billion for 142 licenses). In the six months prior to the auction, multiple auction estimates were published in the $30 billion range, including those by Morgan Stanley, Raymond James, Sasha Javid, and MITRE. More optimistic estimates included the Besen Group’s estimate of $40 billion, the New Street estimate of $52 billion, and the January 2020 C-Band Alliance estimate from NERA and Evercore of $43 to $77 billion.
MITRE conducted a retrospective analysis of the C-band auction to highlight key observations and factors contributing to higher-than-expected results.