A joint venture between the nation’s two largest satellite- TV companies made the largest bids on the first day of a Federal Communications Commission auction for wireless spectrum Wednesday.
Under the name Wireless DBS, Douglas County-based EchoStar Communications and El Segundo, Calif.-based DirecTV offered $282.5 million for 13 licenses.
The bids are the first part of an attempt to offer broadband services to better compete with cable companies.
Wireless DBS’s bid is more than double that of second- place bidder T-Mobile, which shelled out $121.7 million for 23 licenses. SpectrumCo, a consortium of U.S. cable companies such as Comcast, came in third, spending $106.9 million on four licenses.
“It’s a general indicator of what will end up when all is said and done with the auction,” said Jimmy Schaeffler, senior multichannel analyst for the Carmel Group. “Nobody else is standing in satellite’s shoes. This is their future.”
All bids are preliminary until the close of the auction, which could take weeks.
The Wireless DBS bids were for spectrum in the central and Western parts of the country, Hawaii and Alaska. The partnership made the largest bid of the day – $69.08 million – for spectrum in the Great Lakes area.
After the first day, net bids totaled $897.8 million.
The bids came the same day EchoStar reported second- quarter earnings of $168.8 million, or 38 cents a share, compared with $855 million, or $1.79 per share, for the same quarter a year ago.
The 80 percent decrease in earnings is related to a $593 million benefit on tax losses realized by EchoStar in 2005, company spokeswoman Kathie Gonzalez said.
EchoStar said in its filing it would begin shutting off local network channels of subscribers who live in other areas during the third quarter. In May, a federal appeals court barred the company from delivering distant local networks.
Less than 1 million of the company’s subscribers have distant network channels, but EchoStar said the move could have a negative impact on the company’s bottom line.
Shares of EchoStar fell more than 10 percent on the news, closing down $3.60 to $31.48.
Staff writer Kimberly S. Johnson can be reached at 303-820-1088 or kjohnson@denverpost.com.
