MediaFlo’s Win of AT&T Wireless Contract Raises Stakes for FCC’s 700 MHz Auction

Sharon Armbrust | February 12, 2007, 03:16 PM

Qualcomm/MediaFlo has always been expected to be a player in the upcoming Upper 700 MHz spectrum auction, which is tentatively scheduled for January, 2008, but which could take place as early as this coming August, according to some Washington observers. But the stakes in this auction probably just got higher. Now that MediaFlo has landed its 2nd contract (announced today at 3GSM in Barcelona) to provide mobile broadcast TV as part of AT&T Wireless’ 3G service package (the first contract came from Verizon for its VCast service), it should be highly motivated to add more 700 MHz spectrum to its 6 MHz portfolio.

Among the 700 MHz admirers, and possible bidders, are Verizon, T-Mobile, ALLTEL, Leap, the cable MSOs with or without Sprint, satcaster EchoStar, satcaster DirecTV, now controlled by Liberty, which is flush with cash and Aloha, already a 700 MHz spectrum owner of 12 MHz…but a DVB-H technology proponent. Each of these potential bidders has different motivations (and means) for being in this auction. And that will play into their bidding appetites, should they join the fray. Add to that the ever-present speculation over a wild card (read: internet) player and private equity funds in assorted co-productions.

With any variation of this cast of bidders, it’s pretty clear this will be a very competitive sale proceeding. The spectrum is high end, the amount being auctioned (30-60 MHz--30 MHz upper 700 band; 24 MHz lower 700 band) is limited and this may be the last of it, it’s very attractive for all fixed/mobile business models and it is perceived as a powerful weapon or highly fungible trading card in the hands of incumbents as well as new entrants. It’s a good bet you won’t see AWS Auction #66 price points in this go-round.