CBRS

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.

The citizens broadband radio service hit $486.5 million after five rounds Monday. Bids were at $357 million at the end of the first day Thursday (see [2007230074). New Street’s Blair Levin cautioned against judging based on how much money it brings in, the usual auction measure. “The CBRS auction is not about how much the spectrum is worth,” Levin told investors: “The importance here will be determined by other, more subtle metrics. Such metrics would include the extent to which incumbents can use shared spectrum to reduce their cost structure, cable can use CBRS to provide their own wireless services, and new providers who control specific areas, such as universities and office park owners, can use the spectrum to offer niche services.”

Senate Communications Subcommittee Chairman John Thune, R-S.D., and other lawmakers expressed interest Thursday in pursuing legislation and other solutions to address what they see as a dysfunctional relationship between the FCC and other federal agencies on spectrum management. Thune later told us Capitol Hill is unlikely to address the issue this Congress given the dwindling legislative calendar. FCC approval of Ligado’s L-band plan wasn’t directly mentioned despite earlier expectations (see 2007220066).

Bids stood at $357 million after the first, six-hour round of the citizens broadband radio service priority access license auction Thursday. The FCC has two bidding rounds scheduled for Friday. Industry officials are watching the auction closely as an expression of interest in the 3.5 GHz shared band.

Speakers offered a very different view of the citizens broadband radio service during a Connected Real Estate virtual conference Wednesday. With the CBRS auction to start Thursday (see 2007200049), there was both optimism and continuing skepticism (see 2007210052) about how much interest the band will get.