The upcoming AWS spectrum auction could be a desperate attempt for survival by EchoStar and DirecTV says the Denver Post. The companies are part of a consortium, with Rupert Murdoch and others, that was recently approved to bid for spectrum.
Proving the importance of the move, the group has put down an upfront payment of almost a billion dollars — the largest in the auction! The article says that buying access to wireless networks that can deliver voice, video and high-speed Internet access is crucial for the satellite companies, and could signal an upcoming merger between the two.
While Echostar, DirecTV and Rupert Murdoch have been reported to be interested in wireless through a partnership with McCaw’s Clearwire or via the auction, some say that the spectrum being offered in the upcoming auction might be incompatible with mobile WiMAX technology.
It is still not clear how the satellite operators plan to use the spectrum. We have contacted both companies and are waiting to here more about their spectrum plans, while spokespersons from DirecTV said that FCC rules prohibit them from commenting.
Whatever wireless plans Murdoch et al have, a strategy to to own both content and distribution could be part of Murdoch’s transformation of his media conglomerate in the two-way interactive world of the Internet. Wireless broadband could offer a crucial way for the company to reach consumers willing to participate in this “two-way web” and open up a new source of advertising revenues.