C-Band Auction Sets Record, Grossing $81B in Phase One
The FCC’s C-band auction has set a new FCC auction record at the end of its first phase, grossing $80.9 billion. This far exceeds previous estimates for the auction, which were in the range of $26 billion to $51 billion. It also smashes the previous FCC auction record of $44.9 billion for the Advanced Wireless Services (AWS-3) auction that concluded in 2015.
The FCC reported Jan. 15 that bidders won all all 5,684 new flexible-use overlay licenses for spectrum in the band. This spectrum in the 3.7–3.98 GHz band is considered prime spectrum for 5G services because of its geographic coverage and capacity. The FCC has not released the names of the winning bidders. The auction now enters the assignment phase, in which winning bidders can bid for frequency-specific licenses.
Outgoing FCC Chairman Ajit Pai said in a statement that this auction significantly advances U.S. leadership in 5G and will allow consumers to benefit from 5G services more quickly.
“These results represent a strong endorsement by the private sector of the service rules and transition plan put in place by the FCC to quickly make the C-band a critical part of 5G rollout in the United States. And they vindicate the hard choices the FCC made during the C-band proceeding — and that we made them,” Pai said. “The FCC confronted a host of technical, legal, practical, and political challenges in structuring this auction. It would have been easy to delay. But we rightly pushed ahead and overcame every one of those obstacles.”
FCC Commissioner Brendan Carr also commented: “The close of the C-Band auction today further ensures that the strongest 5G platform in the world will be built here in the U.S., and the results make clear that we made the right decision to move forward.”
Satellite operators Intelsat, SES, Telesat, Eutelsat, and Star One are working to clear the portion of the C-band that is being auctioned off. The companies, through the C-Band Alliance, originally advocated for a market-based approach to clearing the spectrum, which would have left them with much of the profits. But instead, the FCC voted 3-2 to hold a public auction, and funds raised will go into the U.S. Treasury.
Satellite operators agreed to clear the spectrum in exchange for relocation costs and incentive payments for clearing the spectrum on an accelerated timeline. The FCC decided on $9.7 billion of accelerated relocation payments, most of which will go to Intelsat ($4.87 billion) and SES ($3.97 billion). Satellite operators must first clear 120 megahertz of spectrum in 46 partial economic areas by Dec. 5, 2021. In a second phase, they must clear the lower 120 megahertz in the remaining areas, plus an additional 180 megahertz nationwide, by Dec. 5, 2023.
The clearing has led to an uptick in Geostationary (GEO) satellite orders for C-band replacement satellites. Intelsat has ordered five C-band satellites from Maxar Technologies, and two satellites from Northrop Grumman. SES has ordered two satellites from Northrop Grumman, and two satellites from The Boeing Company.