This is the spectrum that will support 5G high-bandwidth products. The most unusual aspect of this auction is that the FCC is offering much wider channels than ever before, making the spectrum particularly useful for broadband deployment and also for the frequency slicing needed to serve multiple customers. The Auction 101 includes two blocks of 425 MHz and is being auctioned by County. Auction 102 will include seven blocks of 100 MHz and will be auctioned by Partial Economic Areas (PEA). PEAs divide the country into 416 zones, grouped by economic interest. They vary from the gigantic PEA that encompasses all of the New York City and the surrounding areas in Connecticut and New Jersey to PEAs that are almost entirely rural.
That means that every part of the country could see as many as seven different license holders, assuming that somebody pursues all of the spectrum. It’s likely, though, that there will be rural areas where nobody buys the spectrum. It will be interesting to look at the maps when the auctions are done.
This is the spectrum that can be used to support the fixed wireless broadband like Verizon is now deploying from poles. The spectrum has the capability of delivering big bandwidth, but for relatively short distances of 1,000 feet or more. The spectrum can also be used as a focused beam to deliver several gigabits of bandwidth for a mile to a single point, such as what Webpass is currently doing to serve downtown high-rise apartment buildings.
The industry consensus is that this spectrum will find limited use in rural areas for now since it’s hard, with existing technology, to deploy a 5G transmitter site that might only reach a few potential customers.
The FCC has released the names of the companies that will be bidding in the auction. As expected the big cellular companies are there and AT&T, Verizon and T-Mobile are bidding. Absent is Sprint, but the speculation is that they are relying on the merger with T-Mobile and have elected to sit out the auction.
The big telcos are also in the auctions with AT&T, Verizon, Frontier and Windstream all participating. Absent is CenturyLink, which further strengthens the belief that they are no longer pursuing residential broadband.
The only cable company of any size in the auction is Cox Communications. The other big companies like Comcast, Charter, Altice and many others are sitting out the auction. It doesn’t make sense for a cable company to deploy the spectrum where they are already the incumbent broadband provider. Wireless technology for end users would complete directly with their own networks. Since Cox is privately held it’s hard to know their plans, but one use of the spectrum would be to expand in the areas surrounding their current footprint or to move into new markets. It’s costly to expand their hybrid-fiber networks and 5G wireless might be a cheaper way to move into new markets.
There are some rural companies that are bidding for spectrum. It’s hard to know if the rural telcos and cooperatives on the list want to use the spectrum to enhance broadband in their own footprint or if they want to use the spectrum to expand into larger nearby markets. One of the most interesting companies taking part in both auctions is US Cellular. They are the fifth largest cellular company after the big four and serve mostly rural markets. They’ve already made public announcements about upgrading to the most current version of 4G LTE and it will be interesting to see how they use this spectrum.