A lot of folks were betting that Verizon went big in the C-band auction, but it turns out it went even bigger than some of the highest expectations, laying out over $45.5 billion in gross bids.
The FCC closed the assignment phase of the auction last week, with total winning bids reaching over $81.2 billion. The agency announced the names of the winning bidders Wednesday and said 21 bidders won all of the available 5,684 licenses.
Verizon’s total tally was $45,454,843,197. In second place was AT&T, which spent more than $23.4 billion, followed by T-Mobile, which bid over $9.3 billion. The bid amounts drop significantly after that, with United States Cellular pledging over $1.28 billion. NewLevel II, a private equity firm specializing in broadband, bid more than $1.27 billion.
Sasha Javid, chief operating officer at BitPath who posted regular blogs during the auction, said he was a little surprised to see the total spend of New Level II, given that it didn’t seek bidding credits in this auction.
What’s more surprising, however, is “we reached such large numbers without Comcast and Charter” contributing to the total, as well as Dish Network barely showing up. Bidding as Little Bear Wireless, Dish spent less than $3 million.
Not surprisingly, Verizon also topped the list of the bidders winning the largest number of licenses, with 3,511. AT&T acquired 1,621 licenses, followed by United States Cellular with 254. T-Mobile acquired 142 licenses and Canopy Spectrum picked up 84.
Canopy Spectrum, another long-time private equity spectrum player, is the vehicle that Shamrock Capital/Edward Moise Jr. created to bid in the auction, Javid said. Typically, private equity firms buy licenses to sell to the highest bidder, but with the FCC requiring longer holding periods before they can sell, the firms have had to be more creative, including through spectrum leases, he noted.
Verizon was always expected to “go big” in the auction because it needs mid-band spectrum more so than the other carriers and has the muscle to get it. But until bidding started reaching the super high numbers, most analysts were expecting Verizon to pledge something more in the range of $35 billion. In fact, before the auction started, analysts at Morgan Stanley Research last year forecast the entire auction would raise about $26 billion, with $35.2 billion being on the high end of their estimates.
CTIA tied the results to the critical need for mid-band spectrum. “Today’s announcement marks the culmination of years of hard work from Congress, the FCC and industry. These record-breaking results highlight the demand and critical need for more licensed mid-band spectrum and demonstrate the importance of developing a robust spectrum auction pipeline,” said CTIA President and CEO Meredith Attwell Baker in a statement Wednesday. “They also underscore the commitment by stakeholders across the wireless industry to invest in innovation, drive our economic recovery and ensure that the U.S. leads the 5G Economy.”
Upon seeing the FCC’s proposed rules for the 3.45-3.55 GHz auction that were released today, Michael Calabrese, director of the Wireless Future Project at New America’s Open Technology Institute, said it will be important for an overall spectrum aggregation limit in that upcoming auction.
“Unfortunately, the auction’s $15 billion reserve price, most of that needed to pay the cost of clearing Navy radar off the band, has led to an auction format that like C-band is designed to exclude all but the very largest mobile carriers,” Calabrese said in a statement. “Since we also learned today that Verizon and AT&T together have acquired over 80 percent of the C-band’s 280 megahertz, it will be crucial for competition that the FCC adopt a 3 GHz spectrum aggregation limit as part of the 3.45 GHz auction rules.”