FCC announces new 5G spectrum auction in 2.5GHz band

FCC Chairwoman Jessica Rosenworcel announced Tuesday at Mobile World Congress in Barcelona that the US government agency will auction off spectrum in the 2.5GHz band in July for use in 5G networks, paving the way for telecom companies to further expand their midband holdings.

The 2.5GHz auction represents the pending sale of what Rosenworcel called “the biggest swath of contiguous midband spectrum we have available below 3GHz,” and will be followed by a further auction of midband spectrum in the 3.1GHz-3.45GHz range.

The FCC has had plans for this auction in the works for more than a year, having first sought public comment in January of 2021. The auction will cover roughly 200MHz of spectrum, and will be sold on a per-county basis, according to the earlier request for comment.

The incumbent users in the band represent a unique challenge for the FCC, according to IDC research manager Jason Leigh. Some of this spectrum has been allotted to users of the Educational Broadband Service, which was sold to educational institutions and gives them the rights to those airwaves in a 35-mile radius around a fixed point.

 “The challenge … is that [the licenses] are not uniform,” Leigh said. “Evaluating the value and population coverage for each license is going to be tricky for bidders.”

Leigh said that it appears the FCC will let EBS users keep their existing licenses or lease them out as they see fit.

The auction will be the latest in a series that has seen the FCC sell off large chunks of midband spectrum — generally defined as being between 1GHz and 6GHz — for the purposes of accelerating 5G deployment in the US. The last such auction, whose bidding phase concluded in November, took in nearly $22 billion in exchange for spectrum in the 3.45GHz band.

While most of 5G’s most show-stopping capabilities will be achieved through the use of higher frequencies in the so-called “millimeter wave” bands above 24GHz, mid-band spectrum allows for much wider coverage per access point, since lower-frequency radio waves propagate much more easily over distance. The trade-off is that, because there’s much less spectrum available for 5G use in those lower bands, there’s less available space for the wide channels that allow for very high throughput.

Hence, the midband is often referred to as the “Goldilocks zone” for 5G, as it strikes a balance between signal range and channel availability, and helps explain both why the FCC has pushed to make more of it available and why the carriers have paid so much for the rights to that spectrum. The C-band auction, which sold spectrum in the 3.7GHz range and closed in early 2021, took in nearly $81 billion.