The FCC’s auction of Priority Access Licenses (PAL) in the Citizens Broadband Radio Service (CBRS), which began July 23, ended yesterday raising $4.5 billion in bids. The auction offered 22,631 licenses in the 3550-3650 MHz band, which was the largest number of spectrum licenses ever put on the block in an FCC auction. These 70 megahertz of licensed spectrum may serve a mix of uses, from mid-band capacity for the carriers’ deployment of 5G to private wireless systems used by enterprises and municipalities.
“Ericsson stands ready to support these CBRS networks with its outdoor micro radio, outdoor massive MIMO radio, indoor Radio Dot, and our domain coordinator software fully supporting the PAL frequencies.” Says Paul Challoner VP network product solutions.
Bidders won 20,625 of the 22,631 available licenses, or more than 91.1percent. The auction was a success, according FCC Chairman Ajit Pai, who said the demand for the licenses resulted from reforms made to the rules for the 3.5 GHz band, which were spearheaded by FCC Commissioner Mike O’Rielly. Dave Wright, head of the CBRS Alliance also applauded the results of the auction.
“Whether judged by traditional metrics such as total auction proceeds and price/MHz/Pop, or by non-traditional metrics such as the number and diversity of bidders, the demand for rural as well as metro licenses, and the overall number of licenses awarded – one has to conclude that Auction 105 far exceeded expectations,” Wright said. “This is further confirmation of the value of this shared band and is the last component to be put into service, enabling the full realization and potential of the 3-Tier spectrum sharing model.”
Spectrum Will Enable Smaller, Rural Operators
Although it is too early to know the winners, the auction will most likely enable new market entrants, including smaller and rural operators, to build low-cost carrier-grade networks, which will lead to hundreds of new networks, according to a new report from Colorado-based cooperative CoBank’s Knowledge Exchange, which examines how the CBRS band could change the broadband industry.
“We think that operators can build a high-quality network by acquiring a small amount of licensed spectrum,” according to the report. “Having the ability to toggle between licensed and unlicensed channels allows operators to maintain high throughput speeds. For example, when data traffic levels are high, operators can use their licensed spectrum as an overflow channel and when data traffic is light, they can use the lower-cost unlicensed channel.”
The owners of PALs in the CBRS band will mix with the users of the general authorized access (GAA) licenses to create to create new business models with new market players. Some of the possible bidders in the auction were Chevron, Occidental Petroleum, fiber supplier Corning, John Deere and universities, according to Cobank.
“For rural America, John Deere stands out for its investments in agricultural technologies,” the report said. “Deere’s interest in buying spectrum may signal its intent to become a network operator where it bundles high-speed data connectivity with farming equipment. After all, the company’s investments in precision agriculture, etc. won’t be fully realized until access to high speed data networks broadens in rural America.”
The most likely purchasers of the PALs were mobile network operators looking to supplement their other spectrum holdings, cable multiple-system operators (MSOs), existing CBRS-based wireless internet service providers (WISPs), enterprises, local governments, telcos and investors who see the opportunity to obtain CBRS spectrum and then subdivide it into smaller parcels for use by smaller enterprises and entities, according to Iain Gillott, founder and president of iGR, a market strategy consultancy, in an article published by AGL eDigest.
“It is this last group that is particularly interesting,” Gillott wrote. “Because PALs are at the county level, the chances of an enterprise being able to afford a PAL is unlikely, unless it has significant spectrum needs across the entire area. But a larger enterprise/investor could buy one or more PALs in a given area and then make the spectrum available to a single commercial building owner or single warehouse.
“For example, imagine one of the major public cloud providers obtaining PALs across the United State and then making the spectrum available to their cloud customers for internet of things (IoT) applications,” he added.
Detailed auction results, including the names of Auction 105 winning bidders, will be released in a few days. For more information, visit: www.fcc.gov/auction/105.