AT&T To Buy 700MHz Spectrum

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San Antonio — AT&T reached an agreement with Aloha Partners to purchase 700MHz spectrum in all of Aloha’s 281 markets, putting an end to Aloha’s plans for a near-national Mobile DTV service.

AT&T Wireless, however, may eventually use the spectrum for just such a service, but the company also said it might use the spectrum for cellular voice and data services. “We will use this spectrum for either broadcast video or for two-way communications (voice, data and on-demand or multicast content), but not for both,” an AT&T spokesman told TWICE “We will decide based on which option makes sense for AT&T and our customers.”

AT&T plans to buy Aloha’s license for UHF channels 54 and 59 for $2.5 billion cash. The deal is expected to close in six to nine months depending upon government approval.

The deal leaves only one company, Qualcomm, in the Mobile TV market in the U.S. Qualcomm’s own channel-55 spectrum through which it delivers broadcast TV service based on its MediaFLO technology. The service is currently offered through Verizon Wireless in select markets to MediaFLO-equipped cellular phones.

During the summer, another Mobile DTV contender, Modeo, dropped out of the market when it leased its 1.67-1.675 GHz weather-balloon spectrum in the top 300 markets to two investment companies — Telcom Ventures and Columbia Capital. The two companies are also XM Satellite Radio investors. Modeo was a subsidiary of communications-tower operator Crown Castle, which posted net losses for the previous two fiscal years.

AT&T’s 281 Aloha markets cover 196 million people, 15 million of whom are in markets that will be acquired by Aloha. Aloha’s holdings comprise a total of 12MHz of spectrum per market in a band said to be “the optimal spectrum to use for mobile TV applications because of its superior in-building penetration and its economical advantage to cover large areas,” Aloha said. Aloha had also planned to offer high-speed wireless broadband service in its markets.

Both the Aloha and Modeo services were based on the DVB-H (digital video broadcast-handheld) standard. An Aloha trial earlier this year in Las Vegas delivered 24 channels of live programming.

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