A U.S. government auction of 5G frequency rights has drawn offers worth close to $70 billion and the figure could go even higher before bidding concludes, according to a new report. 

The Wall Street Journal reported today that the yet-unnamed bidders have made offers totaling some $69.8 billion so far. The auction, run by the U.S.  Federal Communications Commission, kicked off on Dec. 8 and is expected to continue into January with an interim pause for the holidays.

The 5G standard, which promises to usher in wireless connections up to 100 times faster than what carriers provided before, uses a specific set of radio frequencies to transmit data. Carriers need to buy licenses from the FCC to use those frequencies. Every few years, the FCC holds an auction to give the telecommunications industry an opportunity to buy additional spectrum rights for network upgrades.

The frequencies up for grabs this time around are in the 3.7 gigahertz to 4 gigahertz range, which many 5G-compatible handsets already support. The catch is that this part of the radio spectrum is fairly congested because it’s used by some satellite operators. To free up bandwidth for 5G use, the FCC will require the winning bidders to spend at least $13 billion helping satellite operators switch to a narrower part of the spectrum.

Major carriers such as AT&T Inc. are expected to win a significant portion of the frequencies sold in the auction. But judging by the record sum raised so far, there are likely other bidders who are helping to drive up prices with their offers. 

Among the companies that may be biding for 5G frequencies is Dish Network Corp., which recently outlined plans to build a 5G network covering 70% of the U.S. population by 2023. Another firm that could be in the running is Comcast Corp. It’s best known as a provider of cable internet but this year introduced 5G connectivity options for customers. 

The winners could be announced in February. Though bidding is not yet over, the $69.8 billion worth of offers made so far easily surpasses the $44.9 billion raised in the FCC’s 2015 spectrum auction. The sum is also more than $30 billion higher than what Morgan Stanley was expecting and topped the estimate of investment bank Raymond James by $10 billion. 

The big investments carriers are evidently willing to make in 5G frequencies shows the importance of the technology to their long-term business roadmaps. The $69.8 billion committed so far is perhaps also reflective the size of the new revenue opportunities the telecommunications industry sees in the technology. 

The ultrafast networking speeds promised by 5G are expected to open new income streams for carriers. One such income stream could come from deploying servers at the so-called edge of 5G networks and making the servers available to enterprises, which could use them to host latency-sensitive applications. Major cloud providers and data center suppliers have already started launching products to help carriers address this market. 

Photo: AT&T