Verizon Wireless, Leap Filings Confirm 700 MHz Auction Participation
Verizon Wireless and Leap Wireless will take part in the 700 MHz auction, according to their regulatory filings. Other wireless companies kept quiet Tuesday. Alltel declined to comment. T-Mobile, MetroPCS and Council Tree didn’t return requests for comment. Meanwhile, DirecTV and other pay-TV companies said they won’t bid. Short-form submissions that signal intent to bid were due Monday night, with the FCC due to disclose in a few weeks who filed (CD Dec 4 p5).
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“Verizon Wireless is filing an application to participate in the upcoming 700 MHz auctions, Auction 73 and Auction 76,” the carrier said in a non-docketed FCC filing. In the filing, Verizon asked the Commission to confirm its approval of Verizon Wireless’s ownership structure “as fully in compliance with Section 310(b)(4) and in the public interest applies to any licenses it may acquire in the 698 to 806 MHz band. Verizon hadn’t stated publicly whether it would bid in the 700 MHz auction.
Leap will take part, it said in a filing Tuesday to the Securities & Exchange Commission. Leap applied “through an indirect wholly owned subsidiary,” it said. Denali Spectrum License -- in which Leap has a “non-controlling indirect interest” -- also applied, it said. A Leap spokesman declined to elaborate. Leap may bid “in anticipation of a reauction to occur for any of the blocks where the reserve price was not met in the first round,” Medley Global Advisors said in a note. Leap was among several smaller carriers dissatisfied with the auction rules, the analyst firm said. “Smaller bidders may end up bidding the minimum amount to maintain their eligibility during each round for licenses in blocks where the reserve price has been met, but aggressively bid for licenses in blocks that are up for reauction in the event the reserve price has not been met in the first auction.”
Pay-TV companies of all sizes said Tuesday they'll sit out the 700 MHz auction. Several said they're focusing on the sale of bundled digital TV, broadband and phone service without wireless. Even Cablevision still may not bid. “We have filed the necessary forms to reserve our right to participate in the auction if we choose to do so,” a spokeswoman said, declining to elaborate. Cox filed paperwork to bid on its own, said a spokesman, who wouldn’t comment further. FCC anti-collusion rules limit public comment by prospective bidders on the auction, set to start in January.
DirecTV didn’t file a short form, it said in an SEC filing. The satellite company won’t bid under any circumstances, it said. EchoStar, said to be angling to bid, declined to comment. EchoStar participation would reduce the likelihood of a takeover by AT&T because bidders can’t engage in merger discussions until the auction ends, wrote Wachovia analyst Jeff Wlodarczak. EchoStar stock fell almost 5 percent.
Many other cable companies and cable overbuilders said they won’t bid. Charter will sit on the sidelines, CEO Neil Smit told investors at a UBS conference Tuesday, calling that “an important announcement” but saying no more. “It’s a big relief that you're not going to be bidding in January,” said analyst John Hodulik. Investors have feared that cable operators would spend large sums to start wireless businesses. Smit cited Charter’s success selling so-called triple-play packages of broadband, phone and pay TV. “In ‘07, we've focused primarily around the bundle,” he said. “The bundle is driven and initiated by telephone” service.
Mediacom, RCN, Suddenlink, SureWest and Washington Post Co.’s Cable One will sit out the auction, company officials said in interviews. Officials at Mediacom and Suddenlink said they're devoting energy to the triple play package, not wireless. “That new business we're focused on now is perfecting the landline phone service,” said Mediacom Legal Affairs Vice President Thomas Larsen. “Before we jump into new things, we want to make sure we're fully deployed on the phone service and doing it correctly.” The company hasn’t focused on wireless, Larsen said. Cable One isn’t keen on 700 MHz, a spokeswoman said. The company bought advanced wireless spectrum covering 85 percent of its subscribers in the last FCC auction, she added. Officials at Bresnan, Insight and WideOpenWest didn’t return messages seeking comment. Bright House declined to comment.
Suddenlink is extending phone service into places where it sells cable, said a spokesman. 700 MHz “is not part of our current strategic plan,” he said, declining to be more specific on why the company didn’t file a short form. The company is close to its year-end goal of offering phone service to 80 percent of the homes it passes, he said. “We've been busy this year with rolling out phone and upgrading our Internet speeds to the point where we are either the fastest or among the fastest in many of the towns we serve.” The company doubled maximum download speeds on its two most popular broadband services, to 8 Mbps and 10 Mbps, he said. “We've had a pretty aggressive year.”