08.14.2006 08:00 AM
New spectrum auctions begin

Some of the nation’s largest pay television and mobile telephone operators are now in a fierce bidding contest for valuable spectrums while under competitive pressure to morph into full service multimedia companies.

When the bidding began last week there were 168 qualified participants in the FCC auction for a total of 1,122 licenses for spectrums reclaimed from government use. These include names like Time Warner, Comcast, Cox Communications, EchoStar Communications and DirecTV.

After five rounds of bidding, the EchoStar-DirecTV consortium was a leader, bidding more than $352,000 for 12 licenses. Other early bidders were T-Mobile and a fund led by Charles Dolan, head of Cablevision.

All bidding occurs online during business days. The entire auction process could take several weeks. When it’s over, estimates are that winning bidders will pay the federal government between $6 billion and $20 billion for use of the spectrums.

Though some of the major bidders are primarily television providers, they don’t necessarily want the spectrum to deliver TV signals. Analysts say it is more likely that they will compete with large telcos to provide mobile telephony, broadband connections and other wireless services.

These media companies, in intense competition among themselves in a rapidly changing technological landscape, are evolving into vendors for a full range of communications products and services.

The winning bidders will not be known for weeks because of a format that allows for multiple rounds of bidding. And, even after the spectrum is sold, it is unclear how the winners will choose to use the investment.

Spectrums reclaimed from analog television broadcasting will be the subject of a similar auction next year. Many of the same companies are expected to participate in that auction as well.

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