The United States Federal Communication Commission has officially announced its very first auction of high-band spectrum intended to be used for 5G rollouts. The spectrum in question consists of 1.55GHz worth of frequencies spread across two different auctions. The first will involve spectrum in the 24GHz range, and will be dubbed Auction 101. Auction 102, meanwhile, will be in the 28GHz range. A second set of auctions, meanwhile, will take place across the 37GHz, 39GHz, and 47GHz ranges, with auction names and amounts yet to be announced. Auction 101 is officially underway as of today, and will offer spectrum allotments as two blocks in one county per bid item, with these blocks consisting of 425MHz each. Auction 102 will offer seven blocks of 100MHz per bid item. Auction 101 uses a standard simultaneous multi-round setup wherein bidders will win the specific blocks they're bidding on right then and there, while Auction 102 will be in a two-phase clock auction format where bidders first bid on the amount of spectrum they want, and then winners bid against one another for specific licenses in certain areas and bands.
Background: These auctions are all part of the 5G FAST plan previously announced by the FCC. The idea with that plan is to spread 5G spectrum out and change regulation to make room for easier deployment, with the endgame of ensuring a dearth of spectrum holders have access to 5G spectrum in sufficient amounts for their individual operations. All of this means, ultimately, that spectrum holders will find it easier and cheaper to build out 5G networks than it may have otherwise been, and consumers will have a wider range of better choices when it comes to 5G. To some extent, this plan is already making headway. Using Auction 101 and Auction 102 as an example, the way these two auctions are set up allows spectrum buyers to figure out what areas they want to focus on, and buy up interlocking bits of spectrum in order to allow a range of different deployment styles depending on the kind of hardware they have on hand and what their budgets look like.
Impact: It's worth noting that the spectrum being auctioned right now is going to be among the most hotly contested 5G spectrum, simply because of how conducive it is to being used with small cells, which has been stated as the preferred main 5G buildout method of three of the four major wireless carriers. It will also be useful for fixed 5G, which has the potential to upset the landline broadband industry. 5G offers high enough speeds and bandwidth measures to make it usable as a home and business internet solution, and it may be deployable in areas that would be cost-prohibitive with traditional broadband. Additionally, because small cells and fixed 5G coverage can be deployed for fairly cheap at startup and expanded over time, it's quite possible that prices could be lower than traditional broadband internet, as well. Though it's also possible that the services will be expensive, all it will take to incite a price war is one rogue agent who sells services to customers at or near cost, or uses aggressive promotional pricing. To be sure, both tactics are already quite common in the wireless industry.