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Cell phones, garage door openers, police scanners, broadcast TV, and Navy radar systems all have one thing in common. They use one of the scarcest resources on the planet... spectrum.
On top of that, everyone is using it more than ever as we stream movies from our phones or video chat with a friend or relative across the country.
And for 5G stocks, things are about to get even more interesting...
As a little background, in 2010, the U.S. Federal Communications Commission (FCC) set in motion a plan that would open up some of the most valuable spectrum through the National Broadband Plan. Finally, in 2015, the FCC zeroed in on the 3.5Ghz band, dubbed the innovation band. It picked this spectrum given its ability to support high-speed connectivity for 5G networks, fixed wireless offerings, and even the ability to power private wireless networks to support IoT services.
The FCC adopted rules for shared commercial use of the 3.5Ghz band of spectrum, which would officially establish the Citizens Broadband Radio Service (CBRS), a swath of spectrum historically used by satellite ground stations and the Navy.
Now, roughly five years later, on July 23, over 200 companies will bid on over 20,000 available provisional access licenses (PAL) in the 3.5GHz band in the FCC auction for the CBRS spectrum. CBRS Auction 105 will be one of the largest and most anticipated auctions as Verizon Communications Inc. (NYSE: VZ), T-Mobile US Inc. (NASDAQ: TMUS), AT&T Inc. (NYSE: T), Charter Communications Inc. (NASDAQ: CHTR), Comcast Corp. (NASDAQ: CMCSA), Dish Network Corp. (NASDAQ: DISH), and many others bid for a piece of spectrum.
Even companies like Deere & Co. (NYSE: DE) and Chevron Corp. (NYSE: CVX) are looking for a piece of the action.
Here's why there is so much interest.
The Spectrum & 5G Connection
As I mentioned earlier, not only is this spectrum extremely desirable because it can be used for 5G networks, but also because it can be used almost immediately. In 2015, the FCC gave operators until April 17 of this year to have properly certified CBRS equipment.
While this was extended due to the current pandemic, most of the certification has already happened.
Many bidders have already deployed CBRS equipment or have tested gear in labs and fields trials and have deployment plans in place. On the day the FCC issues the PAL licenses after the spectrum auction is complete, the data will be plugged into the Spectrum Access System (SAS).
The spectrum will be live.
That is why this auction is so exciting and unlike any other. In past auctions, it could take months or years to deploy spectrum, but in this case, AT&T, Verizon, or T-Mobile can instantly bolster their 4G and 5G networks across the country.
Both AT&T and Verizon have already disclosed part of their plans for the CBRS auction. AT&T plans to use CBRS spectrum to help build out fixed broadband services in 18 states as part of the Connect America Program (CAF) and get it running on over 1,000 towers to help meet CAF commitments. Verizon is going a different direction and is ready to deploy new capacity solutions to high-traffic areas such as stadiums, venues, and airports. This spectrum could help it bolster its 4G LTE capacity in a cost-efficient fashion at first and eventually build it into its 5G network.
This new spectrum means one thing for wireless networks. Once the spectrum is won, new equipment from radios to small cells will be installed in order to boost mobile networks. And that will mean massive profits for the companies best positioned to ride the 5G trend.
You can click here to learn more about Michael Robinson's premium research about who those companies are and how you can claim your own potentially life-changing stake in its success.
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About the Author
Alex Kagin is the Director of Technology Investing Research at Money Map Press. He has spent the last decade working in equity research, most recently with Energy Capital Research Group (ECRG), where he led technology stock research along with working as part of a team developing a customizable financial data platform for securities analysis.
Prior to joining ECRG, Alex spent 8 years at DeMatteo Research, a boutique primary research firm and broker-dealer servicing the institutional investment community. He managed the Tech, Media, and Telecom vertical where he spent time connecting with hundreds of tech executives and hedge funds to get the pulse of the market.
Alex has a B.S. in Economics from American University and previously held Series 7 and 63 security licenses.