Wireless Newsfactor says the entity formed by rivals EchoStar and DirecTV (Wireless DBS), is activating plan “B”. Wireless DBS withdrew from the auction on Aug. 16, although they paid nearly $1 billion upfront on a deposit to bid on AWS frequencies near the cellular PCS band.

The FCC’s AWS auction has now generated more than $13B at the end of round 48 for the 1.7/2.1 GHz frequencies. Of the 168 bidders who started the auction, 124 remained Friday. The auction is expected to bring in as much as $15 billion to the government. It started Aug. 9 and could wrap up in another week or so.

T-Mobile was among the most motivated since it lacks the spectrum of No. 1 Cingular Wireless and No. 2 Verizon Wireless. Cingular has the winning bids on 45 licenses valued at about $1.22 billion. Cable operators and Sprint, via SpectrumCo, are the third largest overall bidders. So far they placed a $2.2B bet for a huge chunk of spectrum, nationwide. Cable companies, in conjunction with Sprint, may use that for wireless phone services.

Satellite operators dropped out when the bidding got too rich.

Now they may be implementing plan “B”, says NewsFactor. That would be Mobile WiMAX via Clearwire, or alternately, ATC from satellite providers. Satellite operators, they believe, are contemplating mobile virtual network operator (MVNO) partnership with Clearwire or satellite phone providers.

An MVNO deal would essentially provide Clearwire with instant nationwide wireless coverage until the company completes its own higher-speed WiMAX infrastructure in the coming years. In turn, striking a deal with Clearwire would give DirecTV and EchoStar access to a state-of-the-art wireless network, letting them quickly start competing with cable companies and telecom providers.

If an arrangement with Clearwire doesn’t work out, EchoStar and DirecTV could instead opt for a little-known technology called ancillary terrestrial component (ATC). ATC uses a combination of satellites and terrestrial equipment to provide high-speed wireless data and voice services in urban areas. And like a deal with Clearwire, using ATC would be cheaper than creating a traditional wireless network from scratch.

DirecTV and EchoStar are unlikely to see many contenders for the ATC-related spectrum currently in the hands of several companies.

Wireless DBS would have had to pay $2 billion for the Auction 66 spectrum, plus another $3 billion to build a network covering much of the nation. But an ATC network would only cost $1.5 billion to construct, Watts estimates. And it would cover more of the country.

So, which ATC-related spectrum holders could DirecTV and EchoStar get together with? The list of potential playmates includes Globalstar, expected to go public this year, ICO Global Communications, Motient, SkyTerra, and Inmarsat.

What makes ATC technology more attractive than an arrangement with Clearwire? Because satellites are part of the ATC networks, ATC phones will work in the event of a natural disaster like a hurricane.

But ATC has a few drawbacks. For instance, because ATC is expected to be less widespread than current cellular technologies, ATC handsets will likely cost $5 to $20 more than today’s cell phones.

RCR Wireless reports the Sprint Nextel cable joint venture (SpectrumCo), appears to be achieving a national footprint without the benefit of costly regional licenses.

As of round 46 of the AWS spectrum auction, the JV had high bids on 128 spectrum licenses covering 250 million people, out of a U.S. population of about 300 million. Sprint Nextel and its cable partners had high bids of slightly more than $2 billion for those licenses.

Katie Fehrebacher explains there are two stages in the AWS auction. The AWS auction has now entered the second stage where bidders need to bid actively on at least 95% of current bids — stage one bidders had to be active on 80%. The rule is meant to stop companies from holding off on bidding until the last minute.

Stage two is an indicator that the bidding is winding down.

The Washington Post profiles the rise and fall…and rise of AWS Wireless, one of the leading bidders in the current airwaves auction.

Related DailyWireless articles include; Satellite AWS DropOut, AWS Auction: Week 2, AWS Auction: Week 1, MSS: AWS Alternative?, Funding Rural Broadband, WiMAX Trial Results, WiMAX Market Research, MSS: AWS Alternative?, US CellSat, Global Satellite Providers Now Three, Satcom Doubles Up, Biggest Spotbeam Sat Launched, WiMax Moonshot?, FCC Approves Big Mobile Sat, U.S. Cell Sat, Inmarsat Plans Domestic Satphone.

Posted by Sam Churchill on Friday, August 25th, 2006 at 6:31 am.