One of the less noticed big events of recent days was the conclusion late last month of the Federal Communications Commission’s C-Band Auction. The auction allocated licenses for a wide swath of mid-band cellphone spectrum, the airwaves that will be critical for providing 5G service. It generated $81.1 billion in revenue in a single auction event: 57 applicants qualified to bid in the auction, and 21 bidders won the available 5,684 licenses. Not a single license went unsold.

As best I can tell, it was the biggest auction ever. For a single auction event, the prior record appears to be Germany’s 3G UMTS spectrum auction of July and August 2000, which generated some $70 billion in 2021 dollars. (The prior U.S. record of $41.3 billion, set only six years ago by the FCC’s AWS-3 Auction, was almost exactly doubled in the C-Band auction.)

The Broadcast Incentive Auction of 2016, launched to repurpose spectrum from broadcast television to mobile broadband, attracted far greater attention, but it was, in retrospect, a much smaller affair, generating $19.8 billion in its forward auction and paying out $10 billion in its reverse auction.

The scale of last month’s single auction event was staggering. The entire annual auction sales of either of the most famous auction houses (pre-pandemic) is fractional by comparison: about $5 billion each for Christie’s and Sotheby’s. While the sales in the typical weekly auction of 6-month T-bills is about $50 billion — well under 1% of that amount is the interest payment determined by the auction. The largest IPOs in history have each raised under $30 billion. Perhaps the only historical event that provides competition occurred back in the year 193 A.D., when the emperorship of the entire Roman Empire was put up for auction. However, it is hard to estimate purchasing power parity for Roman sesterces in today’s dollars.

A few individuals criticize spectrum auctions today, but their arguments display a profound misunderstanding of basic economics and finance, as well as a strong partiality for private interests. It is sometimes argued that the hefty sum paid by a winner will reduce its capacity to build out the network or will raise its prices to consumers. As if companies granted public assets for free would charge consumers any less than those who pay dearly for the spectrum. As if companies granted public assets for free would not buy back shares of their own stock to replicate the same amount of leverage as those that pay tens of billions of dollars to the government.

Whatever one’s concerns about post-auction debt levels, the markets seem to view things differently. The share prices of Verizon, AT&T and T-Mobile, the three big winners, were essentially unchanged in the next morning’s trading following last week’s announcement of auction results.

Most naïvely, some assert that winners lack the incentive to build the necessary 5G infrastructure. Verizon has just spent $45 billion and AT&T has just spent $23 billion. Is it being seriously argued that their intention is to stockpile this spectrum and not make full use of it?

More than anything, the auction is a government success story in a policy area that has not yet become politicized. The goal of starting the C-Band Auction in December was set pre-COVID, which made for unique challenges. Fortunately, this would be an internet auction. Nonetheless, all pre-pandemic FCC auctions had required extensive in-person coordination from secure locations, both for the FCC and for bidders. But everybody involved with the auction stepped up to the challenges and adapted to the realities of the past year. The auction ran smoothly and seamlessly, despite the many obstacles. Indeed, it began amid a third wave of the pandemic and continued as chaos rocked Washington D.C. It completed successfully and as one for the record books.

The overriding objective of a spectrum auction is to put spectrum licenses in the hands of those who value them the most and to obtain efficient outcomes. The auction helps to assure that the winners are companies with business plans and budgets for harnessing this spectrum to provide 5G service. The record revenues for the public are just a happy side effect.

Lawrence M. Ausubel (ausubel@umd.edu) is a professor of economics at the University of Maryland and chairman of Power Auctions LLC, a Washington D.C. company with which the Federal Communications Commission (FCC) contracts for auction design and implementation services, including for the C-Band Auction. The opinions expressed are solely those of the author and do not represent the views of the FCC, which has not reviewed or approved any statement in this article for accuracy or validity.