Spectrum Valuation ($SATS) - Part 9
Part 9 of a multi-part series on the economics of spectrum and EchoStar’s spectrum portfolio
Part 1, 2, 3, 4, 5, 6, 7 and 8 are here.
Back to our regularly scheduled programming. Today we will focus on EchoStar’s 3.55GHz block (CBRS). Maybe we can think of CBRS as the espresso after dinner - a small cup with a jolt of MHz.
3.55GHz Block
100 MHz
3550-3650 MHz Bands
History
Citizens Broadband Radio Service (CBRS) spectrum uses a three-tiered sharing framework that includes incumbent users (primarily naval radar), Priority Access License (PAL) holders, and unlicensed General Authorized Access (GAA) users. The CBRS band is subdivided into 10 MHz channels, and PALs are awarded on a county-by-county basis, rather than large regional licenses, making it ideal for targeted 5G deployments.
DISH (under Wetterhorn Wireless LLC) acquired its CBRS holdings in FCC Auction 105 in 2020. DISH won 5,492 PALs across the country, more than any other participant, spending approximately $912M. The average price paid by DISH was $0.15 per MHz-POP. DISH’s winnings were broad in geographic scope, giving it a nationwide CBRS footprint, particularly in markets where it lacked other mid-band assets (so more licenses in smaller counties). The total proceeds from Auction 105 was $4.6B. Verizon is the other big winner in the auction ($1.9B). Both CHTR and CMCSA also bought CBRS PALs in this auction.
The CBRS holdings sit adjacent to DISH’s 3.45–3.55 GHz spectrum won in FCC Auction 110, creating the opportunity for up to 200 MHz of contiguous mid-band spectrum (3.45–3.55 GHz + 3.55–3.65 GHz). This alignment strengthens DISH’s ability to deploy high-capacity 5G services in dense or suburban areas.
However, CBRS also comes with constraints, most notably power limitations and interference protections due to its shared nature. DISH and others have advocated for raising these limits to better align CBRS with traditional, exclusive-use mid-band spectrum like C-band and 3.45 GHz. Carr historically has been supportive of raising power limits.
DISH’s CBRS block is unencumbered.
Compliance of Build-out Requirements
These PALs are county-level, unpaired 10 MHz licenses with a 10-year renewable term. Under FCC rules, they’re renewable “subject to build-out requirements,” meaning licensees must demonstrate “substantial service” within the initial term to be eligible for renewal. DISH must put each PAL into service and maintain qualifying operations (surface-level deployments across various counties) to satisfy the renewal test.
Spectrum Characteristics
The band covers the 3550–3650 MHz range. Unlike exclusive-use bands like AWS or 3.45 GHz, the CBRS band uses a three-tiered shared-access model:
Incumbents (e.g., U.S. Navy radar) get top priority and can preempt users in coastal and protected areas.
PALs (DISH and others) have priority access but must coordinate use through a Spectrum Access System (SAS).
GAA users get opportunistic access to any unused CBRS spectrum.
Practically, in most inland U.S. markets, incumbents (Navy) are non-operational, so the band functions like mid-band licensed spectrum. Along coasts and near Navy facilities, PAL and GAA users can face preemption or limited availability, though this is managed by SAS providers (e.g., Google, Federated Wireless).
CBRS is constrained by lower EIRP limits than typical mid-band licenses. PAL base stations are capped at 47 dBm/10 MHz, compared to 62–64 dBm for traditional C-band or 3.45 GHz. This limits coverage radius and penetration, making CBRS best suited for dense small-cell deployments and private networks.
CBRS faces growing regulatory uncertainty. Recent federal legislation mandates the FCC to identify and auction 800Mhz of spectrum between 1.3 GHz and 10.5 GHz by 2034, with no explicit exemption for CBRS, while providing exemptions for others. This has raised alarms among cable operators and private network providers who rely on CBRS. While PALs were auctioned in 2020 and are protected for now, the longer-term status of GAA users is unclear. Policymakers could seek to restrict renewals or enable exclusive-use licensing.
Recent Valuation Comparables (All Mid-Band Transactions)
See Part 4 for a summary of the transactions in the mid-band segment.
Potential Bidders
Let’s put the potential regulatory changes aside for this section, as the uncertainty will dampen any M&A activities.
Verizon, AT&T, T‑Mobile each participated in Auction 105. While AT&T and T‑Mobile didn’t secure as much spectrum initially, all three continue to deploy CBRS to supplement their core networks. MNOs might buy more CBRS PALs to enhance performance in suburban and rural areas.
Comcast, Charter, Cox, Midco were also active bidders in Auction 105. Charter recently announced “full deployment phase,” with thousands of CBRS radios in markets like North Carolina and Alabama. These providers value CBRS for wireless offload, small-cell densification, indoor coverage, and as part of the path toward becoming full-fledged facilities-based mobile operators.
My Valuation
I estimate the market value of DISH’s CBRS licenses to be approximately $0.15 per MHz-POP, consistent with their acquisition cost in Auction 105. There is limited secondary trading data to support a re-rate, and the band’s power constraints and regulatory risk justify a conservative mark. That said, a bull case could emerge if EIRP limits are lifted or if PALs are reclassified as exclusive-use licenses. For now, I estimate a $1.0B value for DISH’s 6.1B MHz-POPs, with good downside protection and a wide upside error band depending on FCC policy direction.
My Key Takeaways
The key takeaways for the CBRS block are:
DISH’s 6.1B Mhz-POP CBRS block is no joke, despite its inherent limitations. These limitations might slowly go away, making this a cheap block
CBRS is used mostly as network fillers, or specialized uses such as private enterprise networks
There are questions related to CBRS’ status under Trump’s spectrum plan - whether this will be fully changed into exclusive-use spectrum is yet to be seen, but the uncertainty will weigh on this band for the foreseeable future
These potential changes could increase the value of PALs, but also reduce near-term deployment of CBRS infrastructure
CHTR and CMCSA are both building out cheap small cell networks using their CBRS holdings to offload mobile traffic. The uncertainty related to CBRS regulation might sour their enthusiasm for CBRS and force them to evaluate other bands (per chance to dream, ay AWS-4!)