An Examination of Apparent Disappointing 600 MHz Auction Results

With the 600 MHz auction results expected soon, it’s becoming increasingly clear that those results are likely to be disappointing. More and more industry observers are predicting that prices will be considerably lower than many initially expected — and lower they were in the 2015 AWS-3 auction, the most recent major spectrum auction. The Moffett Nathanson researchers pose several potential explanations for why the 600 MHz auction results appear poised to be considerably lower than the AWS-3 results. One idea relates to the value of lower-frequency vs. higher-frequency spectrum in today’s market. It wasn’t long ago that many industry observers were referring to lower-frequency spectrum as “lakefront property” because of its excellent propagation characteristics, which enable a carrier to cover a large area with a relatively small number of cellsites – albeit with capacity constraints. At the time 600 MHz auction results were first forecast, 5G appeared to be a more distant possibility than it has proven to be. Now that carriers are talking about beginning 5G deployments in 2017, I would expect to see much more intense competition for ultra-high-frequency spectrum best suited for 5G – including spectrum in the 28 GHz, 37 GHz, 39 GHz and possibly 12 GHz bands.