Satellite group bows out as auction bids reach $11 billion
Bids for wireless spectrum being auctioned by the FCC have topped $11 billion, with the departure of a partnership of satellite TV companies from the process being the most noteworthy event thus far.
As the second week of the auction nears conclusion, 137 groups have bid $11.1 billion through 26 rounds. Conspicuously absent among those participants is Wireless DBS, a consortium tied to Echostar and DirecTV, which dropped out of the process early despite putting down the largest initial deposit, said Roger Entner, wireless analyst for Ovum.
“We’re still early in the game and when the heat notched up, the first ones to drop out were the satellite guys … it shows how alien to them the wireless industry is,” Entner said, noting a claim from DirecTV’s Rupert Murdoch that he could build a nationwide wireless network for the extremely low cost of $1 billion. “When he said it, everyone said [Murdoch] either had no clue or he had figured out something nobody else had. Because he is a self-made billionaire, everyone gave him the benefit of the doubt … but this is a little bit embarrassing for satellite.”
As expected, existing cellular carrier T-Mobile has been the most aggressive bidder, with 130 net provisionally winning bids totaling $3.8 billion thus far. A Verizon Wireless partnership has bid almost $2.8 billion for four licenses, and SpectrumCo—a consortium of cable companies—has 95 provisionally winning bids totaling $1.5 billion, according to the FCC.
Entner said the bidding reached the $11 billion much sooner than he expected and may generate as much $20 billion for the U.S. Treasury when the auction is completed. Given the fact that previous auctions have lasted more than 100 rounds, Entner said the bidding likely will continue well into September.
“This can easily go another 3 to 4 weeks,” he said.
