FCC Left a Staggering $22.5 Billion on the Table in Recent AWS-3 Auction

In an analysis of the AWS-3 auction results entitled "Auction 97 and the Value of Spectrum", the Phoenix Center finds that two critical policy choices in the Federal Communication Commission’s auction design left a staggering $22.5 billion on the table.

The first policy choice was the FCC’s decision to reject calls to auction all of the AWS-3 spectrum on an “Economic Area” basis in favor of adopting a “hybrid” block size approach to auction the 1755-1780 and 2155-2180 MHz bands on both an EA and on a smaller “Cellular Market Area” basis. Based on a statistical analysis of the auction’s results, the FCC’s decision to adopt a “hybrid” approach reduced auction revenues by $1.5 billion.

The second choice was the FCC’s decision not to pair the 1695-1710 MHz band with complementary spectrum. The auction data show that the FCC’s decision to go forward with unpaired spectrum cost the US taxpayer as much as $21 billion in lost auction revenue.