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Comcast, TWC Won't Bid in Wireless Auction

Jeff Baumgartner
LR Cable News Analysis
Jeff Baumgartner
12/3/2007
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Two key members of the SpectrumCo joint venture -- Comcast Corp. (Nasdaq: CMCSA, CMCSK) and Time Warner Cable Inc. (NYSE: TWC) -- confirmed Monday that they will not submit bids for 700 MHz spectrum.

Cox Communications Inc. plans to issue its position on the subject later today, according to a company spokesman. Officials for Bright House Networks , the fourth member of the J.V., were not immediately available for comment.

Time Warner Cable President and CEO Glenn Britt broke the news Monday morning at the UBS Global Media conference.

"We are not going to be in the auction phase," he said.

Comcast disclosed its decision not to bid in a prepared statement. (See Comcast Won't Bid on 700MHz .)

Today (Dec. 3) is the deadline for bidders to announce their intentions for the 700 MHz auction, which is slated to start Jan. 24, 2008, and ties into the February 2009 broadcast TV digital transition.

The decision by Comcast and Time Warner Cable comes as a bit of a surprise considering the National Cable & Telecommunications Association (NCTA) , cable's largest pressure group, urged the Federal Communications Commission (FCC) in late May to give MSOs a fair shot at the spectrum. NCTA made the argument amid worries that operators would bid for the capacity only to hoard it and keep it out of the hands of competitors. (See Cable Wants In on TV Spectrum Auction .)

Although Comcast and Time Warner Cable will not be part of the bidding, they, along with Cox and Bright House, still have a mobile play through the joint venture with Sprint Corp. (NYSE: S). Last fall, SpectrumCo also acquired 137 wireless spectrum licenses for the FCC's auction of advanced wireless services, but its members have yet to say how the capacity will be used. (See Cable Wants In on TV Spectrum Auction .)

Comcast noted that the 20 MHz of spectrum acquired in the AWS auction "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."

"We haven't decided completely how we're going to use it," Britt said of the AWS spectrum. But he remained relatively cool about how imperative he believes wireless is to cable's overall strategy.

"I don't, at the moment, think a quadruple play around today's business is a big deal," Britt said Monday. He also downplayed the possibility that Time Warner Cable would look into building its own wireless grid.

"We certainly have no intention of building the fifth cellular network," Britt said, noting that the existing networks, with four big players, already represents "a pretty saturated market."

That comment runs counter to an Associated Press report last month speculating that that cable operators, including Time Warner Cable, were considering a plan to build their own wireless network.

"We're not going to do anything stupid," Britt said later, when asked about how much capital Time Warner Cable might apply toward a wireless/mobile play.

Britt seemed more in favor of possible partnerships and investments around 4G-related systems, but only "as an offensive move."

Although the operators linked to SpectrumCo have yet to outline an AWS spectrum plan, the MSOs involved still have a fallback resale deal with Sprint, but the longer-term prospects of that relationship has dimmed in recent weeks.

Sprint, which dropped out of the SpectrumCo consortium earlier this year, revealed last month that it would freeze the expansion of "Pivot," the brand name of the wireless service offered with its cable partners. Sprint, which cited lingering provisioning issues as the root cause of that decision, said at the time that Pivot had been rolled out in 33 markets and is offered in about 20 percent of Sprint's retail outlets. (See Sprint Halts 'Pivot' Expansion.)

"So far, we haven't seen great demand for that," Britt said Monday of the Pivot J.V.

— Jeff Baumgartner, Site Editor, Cable Digital News

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