EchoStar, Vulcan Throw Hats Into 700-MHz Ring

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The 266 applicants that have filed to participate in the Federal Communications Commission’s 700-Megahertz spectrum auction next month include a subsidiary of EchoStar Communications and Paul Allen's Vulcan Capital, which is the majority owner of Charter Communications.

Companies that had previously confirmed they would potentially bid in the auction, slated to begin Jan. 24, include Cablevision Systems, Cox Communications, AT&T and Verizon Wireless. Other cable operators that filed to participate include Advance/Newhouse Communications, Bresnan Communications and BendBroadband.

Allen’s Vulcan already holds 700-MHz spectrum in Oregon and Washington, Stifel, Nicolaus & Co. analysts Blair Levin and Rebecca Arbogast noted in a research note. Only AT&T, which picked up two 6-Megahertz channels in the 700-MHz band in a $2.5 billion cash deal with Aloha Partners, has a larger 700-MHz footprint currently, they said.

With the new wireless spectrum, cable companies "could be looking to provide either portable data or small business service in their territories, but are likely to be bidding against the regional wireless carriers for spectrum," the analysts wrote.


EchoStar -- which applied under the name of a subsidiary, Frontier Wireless -- had not previously confirmed its participation in the auction, but several analysts speculated that it would be a bidder.

“We see this as a positive development for EchoStar bringing them closer to triple and quadplay services,” JRPG analyst Jamie Townsend wrote, in a research note. “On the downside, this limits EchoStar’s communication between AT&T and EchoStar relative to some sort of merger transaction.”


The FCC accepted 96 of the 266 applications, including Vulcan’s and Bresnan’s. The agency listed 170 as incomplete, including those from AT&T, Cablevision, Cox, Frontier Wireless and Verizon Wireless. The agency has extended the deadline to correct applications from Dec. 28 to Jan. 4.


The auction will parcel out licenses to 62 MHz in the 700-MHz band being made available as a result of the government-mandated switchover for local TV stations to discontinue analog broadcasts by Feb. 17, 2009.


Also in the game: Google, which lobbied the FCC successfully to adopt “open access” rules to ensure the winning bidder of the C-Block of spectrum allows customers to use any application and any mobile device on its network if the winning bid tops $4.6 billion. The FCC indicated it has accepted Google’s application for the auction.


Companies that have confirmed they are not participating include Comcast, Time Warner Cable, Sprint Nextel, DirecTV and Clearwire.

The spectrum in the auction is considered valuable because it supports long-range transmission and can be used for voice, video and data.

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