Cable firms may bid in August auction

Jul 21, 2006 11:00 AM, By Donny Jackson

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Cable firms may bid in August auction

A group of cable operators aligned with Sprint Nextel is among the potential bidders for the advanced wireless services (AWS) auction scheduled to begin Aug. 9—a development that could impact the wireless carrier, should the cable firms pursue the airwaves in earnest.

Under the name “SpectrumCo LLC,” a consortium of four cable companies—Time Warner Cable, Comcast, Cox Communications and Bright House Networks—that include Sprint Nextel services in their consumer bundled offerings was among 171 partially completed applications filed with the FCC.

Potential bidders were required to submit upfront payments and resubmit completed applications earlier this week to participate in the auction of frequencies in the 1710-1755 MHz and 2110-2155 MHz bands.

The FCC typically identifies approved bidders 10 to 14 days before an auction begins, an agency spokesperson said.

Even if approved as a bidder, it’s uncertain whether the group of cable operators would bid aggressively during the auction, said Rebecca Arbogast, wireless analyst for Stifel Nicholas.

“That’s one of the big open questions as we enter the auction,” Arbogast said. “It’s hard to judge anybody’s intent at this point. Some keep their mouths shut … and some make statements, but you don’t know whether they’re designed to distract competitors or reflect actual plans.”

Many analysts have indicated that the August auction primarily is a chance for existing wireless carriers like T-Mobile to bolster less-than-ideal spectrum positions. Indeed, participants looking to build new networks may choose to bid in earnest in 2008, when the FCC likely will auction 700 MHz spectrum that has better propagation characteristics than the AWS airwaves, Arbogast said.

“If you’re planning to make a greenfield deployment, it may be better to do it in the 700 MHz band, especially since the band will be clear at about the same time as the AWS band,” she said.

If the cable companies secure their own spectrum, they could build out networks that would let them follow the model incumbent telecom carriers are pursuing—a bundle of video, wireline voice, broadband data and mobile wireless voice owned by the operator. Currently, the cable firms depend on Sprint Nextel to provide the mobile wireless component to their bundles.