Auction Watch: DirecTV, Echostar bow out

The price tag apparently became too high for DirecTV and Echostar. They bowed out of the advanced wireless services (AWS) auction today. The two were part of a venture called DBS LLC that initially was a strong bidder early in the auction, and its $972.5 million deposit was the largest of all 168 bidders that qualified to participate in the auction. Total bids reached $7.1 billion after the fourteenth round.

It's clear these players want a piece of the wireless broadband action, so it should be interesting to see what avenues they pursue. News Corp. and its majority-owned DirecTV business have been linked to an ambitious plan to set up a nationwide WiMAX network in the U.S. through strategic partners. And they've been talking to Clearwire, which could really benefit from the deal now that Sprint Nextel is also deploying WiMAX. What's more, satellite operator Motient has seen its stock rise as high as 10 percent on speculation that DirecTV might partner with the operator. Motient plans to launch satellite services using ancillary terrestrial component (ATC) capabilities. ATC allows satellite operators to develop a complementary terrestrial service that is designed to decrease service costs and expand services into buildings--historically one of the biggest drawbacks of satellite services.

For more about DBS Wireless' lack of participation in the auction:
- check out this article from The New York Times

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