EchoStar, DirecTV Quit Auction for Wireless

A joint venture of rival satellite television providers DirecTV Group Inc. and EchoStar Communications Corp. bowed out of a multibillion-dollar auction Wednesday of U.S. licenses for advanced wireless services.

Analysts said the bidding probably got too high for the companies, which could instead pursue partnerships or acquisitions to add high-speed wireless Internet service to their product lineups to meet growing consumer demand.

The satellite companies, joined by media conglomerate Liberty Media Corp., initially had shown strong interest in the wireless licenses, paying a deposit of $972.5 million, the most put down by any of the 168 bidders that qualified for the auction.

This week, however, the group called Wireless DBS had substantially reduced its participation in the auction.

Analysts have forecast that the Federal Communications Commission’s sale of 1,122 licenses could raise as much as $15 billion.

The auction will continue until there are no new bids, withdrawals or other activity.

Telephone, cable and satellite companies have been competing to offer customers packages of services that include television, high-speed Internet access and voice communications, including wireless.

Analysts were initially surprised by the strong interest of the top two satellite providers before concluding that the companies wanted the airwaves to offer high-speed Internet service.

“DirecTV will definitely do something, and if it’s not going to be a joint venture with EchoStar and build something, my best guess is they will make an investment in some other entity that has spectrum,” Kaufman Bros. analyst Todd Mitchell said.

A DirecTV spokesman said the El Segundo-based company was not allowed to comment on the auction while it was still running.

A representative of EchoStar, based in Englewood, Colo., could not be reached for comment.