Comcast Corp. and Time Warner Cable Inc., the nation's two largest cable companies, said yesterday that they wouldn't seek 700-megahertz spectrum licenses for new wireless services at a forthcoming FCC auction.
Their decisions avoid a potentially costly bidding shoot-out with Google Inc.
Google, the search engine giant, with a $215 billion market capitalization, said last week that it would participate in the government auction, which is scheduled to begin Jan. 24.
Bidding for the 700-MHz licenses will start at $4.6 billion, and the sale could raise up to $15 billion for the U.S. Treasury, according to published reports. Google is expected to compete with AT&T Inc. and Verizon Wireless.
The spectrum has been used by television broadcasters, which are making a transition to digital television and no longer need the spectrum space, the Federal Communications Commission states on its Web site. The spectrum's physics are good for wireless services because the signal can penetrate walls, experts say.
Time Warner chief executive officer Glenn Britt disclosed his company's decision on the 700-MHz spectrum in a media interview and at an investors' conference.
"Comcast Corp. has decided not to bid in the 700-MHz wireless auction," D'Arcy Rudnay, a Comcast senior vice president, said in a statement. "The 20 MHz of spectrum acquired in the wireless auction last year with our cable partners in SpectrumCo provides us with significant long-term flexibility and many strategic options. We will continue to explore how wireless can complement our services through various partnerships and consumer trials."
SpectrumCo is a joint venture of Comcast, Time Warner Cable, Cox Communications Inc., Advance/Newhouse and Sprint Nextel Corp. It won 137 wireless spectrum licenses for $2.37 billion in the FCC's advanced wireless-services auction in September 2006. Comcast's portion of the costs to buy the 137 licenses was $1.3 billion.
Comcast has not said exactly how it will use this spectrum. Some speculate that the company will eventually need radio spectrum space to experiment with mobile-video service.
Wall Street analysts have expressed concern that Comcast might bid on the 700-MHz spectrum and then build an expensive wireless network. Comcast stock rose 2.48 percent, or 51 cents, to close at $21.05 yesterday, while the overall market declined slightly.