Thursday, January 24, 2019

The 28 GHz Auction Closes Successfully

The FCC's 24 GHz auction closed today with bids that exceeded more than $700 million. There were winning bids on at least 96% of the 3,072 licenses.

I've never tried to predict the outcome of auctions beforehand or handicap the outcome, preferring to let the market "speak" for itself. That's what auctions do.

So, as the 28 GHz auction closes, I'll limit my reaction to a few words. There are always those who, no matter the result, wish to characterize the auction du jour as somehow disappointing or some sort of failure but that seems difficult to do in this instance.

Foremost, the auction will result in U.S. wireless providers gaining access to needed high-band spectrum. This high-band spectrum will be an important component of the deployment of 5G infrastructure, including often overlooked backhaul support. In this sense, without more, the 28 GHz auction has been successful.

Second, the auction du jour critics often choose to ignore, in offering up comparative figures from one previous auction or another, that the bidding results will reflect the technical characteristics of the particular spectrum bands at auction. In other words, high-band spectrum like the 28 GHz band almost certainly will lead to different results than low-band spectrum, say, the 600 MHz frequencies. For one thing, high-band frequencies do not allow transmissions to travel as far as low-band ones. Of course, factors like this affect the value of the spectrum.

Finally, for what it's worth, the revenues ultimately realized from the 28 GHz auction appear to be within the range of the pundits' pre-auction predictions regarding the likely results.

In sum, when the auctioneer's gavel brought the 28 GHz auction to a close, from where I sit it looked to be a success. Now it's time to prepare for the next one.