AT&T says Aloha to the bidding

The government isn't auctioning off the wireless spectrum being vacated in the digital television conversion until this January. But AT&T got a head start this week giving Aloha Partners a whopping $2.5 BILLION dollars in cash for two 6-Megahertz channels in the 700-MHz band that reach 196 million people in 281 U.S. markets. There has been wide speculation that this band will be used by AT&T and other potential bidders (Verizon, Google et al) for broadcasting mobile video. One analyst in this B&C MultiChannel News article believes that AT&T has other plans because mobile video hasn't show enough potential to warrant this kind of expenditure and I completely agree with him. Another analyst in the article believes mobile video isn't the answer because of AT&T's agreement with Qualcomm's MediaFlo subsidiary, who has been also been buying up spectrum recently. I disagree with this reasoning. This is AT&T, they are smart enough (see LTE project) to realize the infinite number of services that could come from high speed wireless broadband. Mobile video will undoubtedly be one of these services but probably not the one that will end up yielding the highest ROI.

This also represents a strategic shift towards wireless rather than fiber iptv from AT&T. Verizon is spending a ton on FiOS (recent FiOs news on Engadget). AT&T was expected to follow suit with U-Verse. * With FiOS not a smashing success yet, or at least not looking profitable for the foreseeable future, AT&T may shy away and look more towards wireless and catching up with Sprint whose forthcoming Xohm wireless broadband service is already generating a lot of hype.

*Note: While AT&T was expected roll out its UVerse IPTV service almost aggressively as Verizon is pushing FiOS, they've made it clear that they are not planning on investing in fiber all the way to home like Verizon, which is extremely costly in terms of infrastructure (and risky given the pace of wireless technology innovation)