News

Cablevision Affiliate Big Auction Winner

1/27/2004 9:46 AM Eastern

DTV Norwich LLC, a start-up backed by cable operator Cablevision Systems Corp., was the big winner in the Federal Communications Commission spectrum auction that closed Tuesday afternoon, with total bids reaching $118.7 million.

DTV Norwich promised to pay $84.6 million for 46 licenses, capping a successful big-market strategy that captured the New York, Los Angeles, Chicago, Philadelphia and San Francisco markets.

The FCC put up 214 licenses -- roughly one for each TV market in the country -- and all but 22 ended up being sold. The auction started Jan. 14, but the agency closed it when it no longer received new high bids.

Cablevision's satellite arm, Rainbow DBS, owns nearly one-half of DTV Norwich. The controlling 51% interest is held by George S. Blumenthal Co. Blumenthal is a veteran of the cellular-phone and cable industries in the United Kingdom.

The other big winner was South.com LLC, a company 49.9%-owned by EchoStar Communications Corp. South.com, controlled by Denver businesswoman Phanie Sundheim, picked up 37 licenses for $27.7 million.

South.com paid for the rights in some big markets, as well, including Boston; Dallas; Washington, D.C.; and Atlanta.

South.com's total bid was $42.6 million, but that amount was reduced by 35% pursuant to FCC bidding credits for eligible small businesses.

The commission sold the spectrum to providers of multichannel-video programming and high-speed Internet access using terrestrial transmitters. The FCC calls the service multichannel-video-distribution and data service (MVDDS), which must share the same spectrum band with direct-broadcast satellite carriers.

The spectrum-sharing technology was demonstrated by Northpoint Technology Ltd., which refused to the join the auction and is suing the FCC for holding it.

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