Comcast Corp. and Time Warner Cable, the nation's two-largest cable companies, said today they won't seek 700-MHz spectrum licenses for new wireless services at an upcoming FCC auction.
The decisions avoid a potentially costly bidding shoot-out with Google Inc.
Google, the Internet 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 FCC 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 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. 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," D'Arcy Rudnay, a Comcast senior vice president, said in a statement.
SpectrumCo is a joint venture of Comcast, Time Warner Cable, Cox Communications, Advance/Newhouse and Sprint Nextel Communications. It won 137 wireless spectrum licenses for $2.37 billion in the Federal Communicaton Commission's advanced wireless services auction in September 2006. Comcast's portion of the costs to purchase 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 2.5 percent, or 51 cents, to close at $21.05, while the overall market declined slightly today.