Reauction of AWS-3 Licenses Expected by Year-End
An auction of AWS-3 licenses returned to the FCC by affiliates of Dish Network in 2023 is expected to start and possibly end this year, wireless industry experts said. In addition, the auction will offer unsold licenses from the initial Auction 97, the AWS-3 auction 10 years ago. The FY 2025 National Defense Authorization Act, which authorized the auction, allows 18 months for it to be held. It would be the FCC’s first auction of spectrum for full-power licensed use since 2022, with part of the proceeds going to fully fund the FCC’s Secure and Trusted Communications Networks Reimbursement Program.
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Former FCC Chairwoman Jessica Rosenworcel circulated an NPRM at the beginning of the month (see 2501060044) seeking comment on needed updates “to the service-specific competitive bidding rules to grant licenses for spectrum in the FCC’s inventory in the AWS-3 spectrum bands,” 1695-1710 MHz, 1755-1780 MHz and 2155-2180 MHz. Industry lawyers noted that the NPRM is just a preliminary step and the FCC under Chairman Brendan Carr will likely approve it.
An AWS-3 auction “should be easily doable this year,” New Street’s Blair Levin told us. The FCC can “do it just as they did before, but there will just be fewer licenses.” Many licenses are in important markets, so there should be lots of interest, he added.
Levin, in an earlier note to investors, said that AT&T is the most likely entity to go big in the auction. "It has less midband spectrum than [its] peers, suggesting it will have the strongest appetite for the licenses in re-auction.”
The FCC’s general auction authority expired nearly two years ago. The last auctions were of 3.45 GHz licenses, which ended in January 2022, and 2.5 GHz, which ended in August of that year. Unlike 3.45 GHz, the 2.5 GHz auction saw little interest from most carriers because T-Mobile dominated the band.
Record-Setting Auction
The AWS-3 auction, which ended in January 2015, set a record for the FCC at the time, with $41.3 billion in net bids. It was the first major spectrum auction since 2008. AT&T was the biggest bidder, at $18.2 billion, followed by Verizon and Dish, which each bid more than $10 billion. Dish is now part of EchoStar.
Recon Analytics' Roger Entner said he also expects the FCC will hold the auction this year and sees lots of interest. Charlie Ergen, while CEO of Dish, “bought a lot of blocking licenses that prevented other providers from creating larger contiguous spectrum blocks,” Entner said. “By buying a small license, certain providers can create a large contiguous channel.”
“If nothing else,” the auction “will be a welcome barometer of demand and valuation for lower mid-band spectrum,” emailed MoffettNathanson’s Craig Moffett. “It’s been a long time since the original AWS-3 auctions. And these licenses cover very attractive markets. It will be interesting to see what kind of prices they go for.”
But Summit Ridge Group President Armand Musey said high bids aren’t guaranteed. Auction 97 prices “surprised a lot of people -- and some people attribute the high prices to the bidding strategies of the Dish-related entities,” Musey emailed. “Based on EchoStar's stock price, the market does not value the spectrum at anywhere near the Auction 97 prices.”
Since 2015, most 5G wireless deployment has taken more of a “barbell” shape, Musey noted. Carriers are deploying below 1 GHz for "coverage" and from 2.5 to 4 GHz to meet capacity needs, he said. There are far fewer deployments “in between, where AWS-3 sits.”
Industry experts noted that it generally takes about six months between the release of an auction-procedures public notice -- the next step after comments are received on the current NPRM -- and the start of an auction. In the last major auction, of 3.45 GHz licenses, the notice was released on March 18, 2001, procedures were established June 9 that year, and the auction started Oct. 5.
CTIA, meanwhile, on Thursday stressed the continuing importance of midband spectrum to carriers, releasing a report it funded. In the study, economic consulting firm NERA wrote, “Continued progress depends on reauthorizing the FCC to conduct auctions of an identified pipeline of full-power, licensed spectrum for 5G and beyond.” It continued: “The wireless industry is rapidly approaching a spectrum deficit that will result in network congestion, thereby hindering the growth wireless contributes to the economy.”
NERA found that each 100 MHz of spectrum made available for 5G will add $260 billion to the national GDP, generate $390 billion in consumer benefits and create 1.5 million jobs. The release of the report was timed to the House Commerce Committee's hearing on spectrum issues (see ).