DIREC TV/ECHO: LEAVING AWS AUCTION & MAKING OTHER PLANS?

Sharon Armbrust | August 15, 2006, 07:17 PM

There is no official word yet. But as of Round 16 in the AWS auction, Wireless DBS, the DirecTV/Echo venture, had used up all its waivers and reduced its eligibility by half. So if it doesn't pick up bidding tomorrow (8/16) in Round 17, it is so-long AWS auction.

At the same time Motient (MNCP.PK), a major owner of L Band/1.6 GHz spectrum, which is pegged for hybrid satellite/terrestrial use, rose over 18% to $15.79 8/15 and ICO Global (ICOHA.PK)the other major hybrid spectrum owner of S Band/2.0 GHz spectrum controlled by Craig McCaw was up 12% to $5.82.

DirecTV's major shareholder NewsCorp. indicated over the past few weeks that the company had options for its wireless play among the AWS auction, a hook-up with Clearwire (controlled by McCaw) and the two S/L band options. Stock speculators are obviously guessing that Wireless DBS's backpedaling in the AWS auction signals a move in one of these new directions.

An intriguing move would be for NewsCorp to orchestrate a combination move with the two McCaw entities--Clearwire and ICO Global. That way News and DirecTV get lots of spectrum at both 2.5 GHz and 2.0 GHz and don't get pushed into a riskier high-priced auction buy of AWS spectrum at 1.7/2.1 GHz.

Through Round 10 of the AWS auction Wireless DBS had bid $626 mil. and was the provisional winning bidder on nine licenses. Since that time it stopped bidding and waited as one by one other players overbid on those nine licenses.