Cellcos regain lead in AWS auctions

Satellite players drop out

The satellite television providers, DirecTV and EchoStar, which were bidding together, dropped out of the auction earlier in the week, making it increasingly likely that the former will bring forward its planned alliance with Clearwire, to use that company's WiMAX network to add mobility to its services and create a satellite/wireless quad play to take on the cableco/Sprint partnership and the large telcos' all-IP programs over fiber, DSL and 3G.

While the major cableco quad play activity centre on Sprint Nextel's own planned WiMAX network - through that cellco's venture with Comcast, Time Warner Cable, Cox and Advance/Newhouse - there was also cable interest in Auction 66.

As well as the Sprint group, which remains a major bidder, the major cableco that remains outside the alliance, CableVision, was also in the running. However, CableVision - bidding as the family of its chairman Charles Dolan - dropped out after round 24.

NextWave, which plans to create a third national WiMAX network alongside those of Sprint and Clearwire, also remains a major bidder, as do other regional players such as US Cellular.

From the point of view of creating a new wireless landscape in the US, and kickstarting broad competition in quad play services, the auction may be disappointing, since most spectrum is likely to remain with the carriers with the greatest interest in the status quo.

This will shine a brighter light on the planned 700MHz auction in early 2008, which offers spectrum of more disruptive potential even than AWS, because of its strong propagation quality; and whose timing will be better for disruptive new entrants armed with WiMAX or similar technologies.

It is also likely to light an even greater fire under the broadband wireless/quad play activities outside the classic 3G spectrum, notably the Sprint/cableco plans in 2.5GHz WiMAX and Clearwire's roll-out. And, of course, the early interest of the television providers will have upped the prices, making the FCC likely to reap its targeted reward of $15bn by the end, which comes when there are no further bids.

While many smaller players are dropping by the wayside, at least outside localised and rural bids, there could still be up to 70 more rounds, taking several more weeks.

Copyright © 2006, Wireless Watch

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