10B question 230Based on the results of auctions this year in Spain, England, and Korea, the 3.7-4.2 GHz band would go for $10B-$25B. This was little used until 64 antenna Massive MIMO has suddenly made it very valuable. Antennas in higher frequencies can be smaller, and tens of thousands of 64/128 antenna rigs have shipped. The first results are customer speeds in the hundreds of megabits, confirming the trials and models. There's enough spectrum involved that all the telcos could double their spectrum holding.

In Britain, 150 MHz of spectrum went for 1.05B pounds, about US$1.35B. At that rate, 500 MHz would be $3.3B. The U.S. has almost five times Britain's population, so ~US$16B. None of the four UK carriers got more than 50 MHz, less than ideal. Bidding was strong.

In Korea, 280 MHz went for $2.7B. Adjusting for the U.S. population, that would be ~US$30B.

In Spain, 320 MHz went for US$511M. Spain had only three bidders and enough spectrum for all to get 90-100 MHz, the ideal for the band. So there was no competitive bidding and they got it cheap. 

The FCC is considering skipping an auction for the 3.7-4.2 GHz bands, key for 5G. The market cap of Intelsat, a licensee, has gone up from $500M to $3B, just on the hope Pai and Reilly will let this go through.

That's a remarkable price for a company $15B in debt, has declining sales, and has lost $2B in the last four years. 

(The best experts get auction estimates very wrong. I'm not an expert. This is just a simple extrapolation of the prices abroad. To do better requires deep game theory. and even then the accuracy is low. Ask Charlie Ergen.)

For now, I'll leave it to DC reporters like Cecilia Kang and Brian Fung to figure out the reasons the giveaway may go through. (I'm swamped and they are paid to cover this.) What I bring to the discussion is an updated estimate of the value of the spectrum.

The key claim of Intelsat/Verizon and their supporters is that it is crucial to get this spectrum fast to market because the telcos need it soon. B________. Sprint is doing 2.5 GHz, not 3.5-4.2. Verizon is doing 28 GHz, where they have 800 MHz of spectrum. That's enough for more than a decade. AT&T is doing 39 GHz and has 50 MHz low-band unused. T-Mobile is doing interesting things in the shared 3.5 and 4.9 GHz bands, enough for several years or more. So who needs the spectrum so fast? 

Also, the claim giving it away is much faster than an is bogus. The mmWave auctions this fall were organized this year. Intelsat is threatening to tie things up in court if it doesn't get its way. IANAL, but I've read FCC auction documents and I don't think they have a leg to stand on. It's cheap blackmail.

The Reverse Auction saved US$2-4B, a remarkable success. Think if Pai brought in another US$5-15B here. My progressive friends will never forgive him after Net Neutrality but I can respect him for what he achieves. 

There's another US$2-8B to save by bringing the auction lesson to CAF, but I don't think the FCC has enough courage.

dave askAugust 2018 Verizon's $20B 5G build is starting to add customers in 2018. Gigabit LTE & Massive MIMO became real in 2017 and enow expanding worldwide. Almost all the other "5G" is mid-band, 70%-90% slower + hype. Europe is mostly pr. The term 5G has been bastardized, unfortunately.

Being a reporter is a great job for a geek. I'm not an engineer but I've learned from some of the best, including the primary inventors of DSL, cable modems, MIMO, Massive MIMO, and now 5G mmWave. Since 1999, I've done my best to get closer to the truth about broadband.

Send questions and news to Dave Burstein, Editor. I always want to hear from you, especially if you catch a mistake.


 5G Why Verizon thinks differently and what to do about it is a new report I wrote for STL Partners and their clients.

STL Partners, a British consulting outfit I respect, commissioned me to ask why. That report is now out. If you're a client, download it here. If not, and corporate priced research is interesting to you, ask me to introduce you to one of the principals.

It was fascinating work because the answers aren't obvious. Lowell McAdam's company is spending $20B to cover 30M+ homes in the first stage. The progress in low & mid-band, both "4G" and "5G," has been remarkable. In most territories, millimeter wave will not be necessary to meet expected demand.

McAdam sees a little further. mmWave has 3-4X the capacity of low and mid-band. He sees an enormous marketing advantage: unlimited services, even less congestion, reputation as the best network. Verizon testing found mmWave rate/reach was twice what had been estimated. All prior cost estimates need revision.

My take: even if mmWave doesn't fit in your current budget, telcos should expand trials and training to be ready as things change. The new cost estimates may be low enough to change your mind.