Last Friday I said that we'd know the answers to a few strategic questions once the official 700 Mhz auction intent to bid forms were filed at the FCC on Monday. One question, whether cable is going to pursue wireless in a big way, has been answered in the negative...with the exception of Cox.
The other question about whether AT&T will buy DBS provider EchoStar, has also seemingly been answered in the negative. According to the WSJ, both EchoStar and AT&T plan to bid for the spectrum separately. Under the FCC's anti-collusion rules, the two companies can't really talk about much of anything until the auction has ended, which won't occur until late-spring at the earliest.
I seriously doubt if AT&T were interested in buying EchoStar it would wait until then. For one thing, why would it do that? If EchoStar were such a great asset, wouldn't AT&T snap it up before intervening events scuttle the deal?
More importantly, however, a merger between AT&T and its main video partner would spark more than usual antitrust scrutiny and possibly FCC attention. Approvals of the deal would drag on into 2008 when...a Democratic president could likely occupy the White House. Democrats don't usually like media consolidation and any AT&T-EchoStar merger deal would face tough sledding.
Given all this, don't look for an AT&T-EchoStar merger any time soon.
Update: Forbes has this discussion about how puzzling it is that EchoStar would bid in the first place. The ailing DBS provider won't have the capital to build out wireless networks and if the company hopes to gain only a small slice of the spectrum, what would it do with it? Spectrum is valuable and EchoStar could sell it, but it's unlikely that it could happen quickly.
Cynthia Brumfield at 7:00 PM|Comments(0)
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