TELECOM Digest OnLine - Sorted: Satellite and Cable Companies Battle Wireless in FCC Auction

Satellite and Cable Companies Battle Wireless in FCC Auction

Jeremy Pelofsky (
Thu, 10 Aug 2006 12:21:06 -0500

By Jeremy Pelofsky

U.S. wireless carriers battled with satellite and cable operators on
Wednesday for valuable licenses for advanced wireless services -- like
high-speed Internet access -- on the first day of an auction that so
far has raised $933.5 million.

A partnership of the top two satellite television providers, EchoStar
Communications Corp. and DirecTV Group Inc., led the Federal
Communications Commission sale with top bids for 13 licenses totaling
$282.5 million.

After the day's second round of bidding, the group knocked No. 4 U.S.
wireless carrier T-Mobile USA out of the first place spot it had after
the initial round. T-Mobile has the highest bids for 23 licenses,
totaling $121.7 million.

T-Mobile, a unit of Germany's Deutsche Telekom AG, does not have as
many wireless airwaves as the bigger U.S. carriers and analysts have
expected the company to bid aggressively.

Analysts have predicted the Federal Communications Commission sale
could raise as much as $15 billion and would last several weeks. The
sale includes 1,122 licenses and the bidding will resume on Thursday
and continue until there are no new bids or other activity in the

Telephone, cable and satellite companies are competing to offer
consumers a bundle of voice, Internet, wireless and television
services and some see acquiring the airwaves in the FCC auction as
aiding their efforts.

The cable and satellite companies have not said publicly what they
would do with the wireless licenses if they won them. However,
analysts have suggested satellite firms would use the airwaves for
high-speed Internet access while cable operators could use them for
voice communications.

A consortium of big cable operators was in third place, with the top
bids for four licenses with offers of $106.9 million. They have joined
forces with No. 3 wireless carrier Sprint Nextel Corp. in bidding
during the auction.

That group includes the biggest cable operators, Comcast Corp., Time
Warner Inc., and Cox Communications.

Two smaller licenses covering the New York City and Newark, New
Jersey, area received high individual bids from Dolan Family Holdings
LLC, which has ties to Cablevision Systems Corp. Chairman Charles

Dolan bid almost $25 million for one and $19.4 million for the other,
according to FCC data.

Among larger regional licenses being offered, the one receiving the
highest bid covered a swath of territory that stretches across the
northern United States, including Chicago, Detroit, Minneapolis and
Cleveland. The satellite television group bid $69.1 million for this

Copyright 2006 Reuters Limited.

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