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EchoStar, DirecTV team up for auction; Rivals form joint bid to land share of wireless airwaves

Wed, 07/12/2006 - 7:31am

Copyright 2006 Denver Publishing Company
Rocky Mountain News (Denver, CO)
July 12, 2006 Wednesday
Final Edition
By Joyzelle Davis
From Lexis Nexis

EchoStar teamed up with rival DirecTV to bid in next month's U.S. auction of wireless airwaves, which could finally provide the satellite-TV providers their missing Internet link.

But first the would-be bidders have to fix their application. The joint bid, submitted under the name Wireless DBS, was among the 171 submissions deemed incomplete by the Federal Communications Commission.

The FCC gave all the incomplete filers - which include applications by mobile-phone company Cingular Wireless and a partnership that includes Comcast, Time Warner and Sprint Nextel - until next Tuesday to amend their applications.

The Aug. 9 auction is expected to raise as much as $15 billion, making it the FCC's second-biggest ever. Demand for the 1,122 licenses is expected to be strong because it will give existing wireless carriers like Cingular and T-Mobile a way to offer faster Internet service and improve quality, while allowing cable companies the chance to offer a wireless component to their cable, phone and Internet bundles.

Kathie Gonzalez, a spokeswoman for Douglas County-based EchoStar, declined to comment on the application. El Segundo, Calif.-based DirecTV, which is controlled by Rupert Murdoch's News Corp., said earlier this year it was in talks with EchoStar for a wireless Internet venture.

The unusual pairing of DirecTV, the largest satellite-TV provider with about 15.4 million customers, and EchoStar, whose Dish Network has about 12.2 million, is an attempt to give the companies their own "triple play" to respond to cable companies' package of phone, Internet and video. Comcast, Time Warner and other cable companies have posted big subscriber gains in recent months as they've added more Internet and phone customers.

The closest EchoStar offers to a bundle right now is marketing pacts with telephone companies like AT&T, but telephone providers are less focused on such partnerships as they move into providing their own video services. EchoStar and DirecTV last month also announced that they'll offer broadband service via satellite from WildBlue Communications, which primarily serves rural households.

Rivals EchoStar and DirecTV were once merger partners until regulators scotched the idea in 2002. EchoStar Chief Executive Charlie Ergen in May attempted to squelch continued speculation about a renewed merger attempt between the two, saying his company likes its independence.

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