Media analyst Craig Moffett has weighed in on his picks for the winners and losers among the broadcast incentive auction forward auction "winners" and concluded that Comcast's win was essentially a draw.
Those "winners" were the companies who spent the most on reclaimed broadcast spectrum.
In a note Monday to investors, the MoffettNathanson analyst said it was "curious" to dub the highest bidders as all winners, saying it was more nuanced than that.
"Comcast won… I mean lost," he said, "Or played to a draw. Their seemingly half-hearted participation in the auction [it bid $1.7 billion, well below T-Mobile and Dish, the top two bidders] may ease fears of a spending spree, but it doesn’t convincingly position them to be network operators. Does that mean they may ultimately buy a wireless operator after all?" he wrote.
Moffett had expected Comcast to do a joint venture with Charter Communications after the auction but said Comcast's auction actions belayed that. "Comcast could have bought nationally [as T-Mobile did] but didn’t… By buying only in-footprint [only where it already provides service], Comcast has signaled that Charter is on its own."
Moffett said he expected Comcast to buy twice as much spectrum as it did (20 MHz instead of the 10 MHz Comcast bought) and to do so nationally. Of course, Comcast still has an MVNO deal with Verizon, which Moffett said could “tide Comcast over” in the near term.
He pointed out that Charter had explained its nonparticipation in the auction as being because at the time its Time Warner Cable deal was still pending and so it’s best hope would have been to sit it out and hope Comcast effectively bid on their part and “cleaned things up later.”
T-Mobile was the top bidder at just under $8 billion, and Moffett had nothing but good things to say about that.
"T-Mobile 'won.' Not only did the carrier acquire the spectrum that they needed, they did so at a very good price. T-Mobile’s strong result also helps their negotiating leverage in a potential Sprint merger," Moffett said.
The bottom line, he suggested, was that T-Mobile needed low-band spectrum and got it. He also said it could help a potential merger with Sprint, though Comcast's targeted in-footprint bid could make it harder to argue the strength of Comcast as a competitor to a combined Sprint-T-Mobile. He says that Comcast's strategy now makes it more likely that it would buy a wireless operator to get into the business.
Dish was the second-largest bidder, but Moffett was far less impressed. "Dish lost. The bull case for most Dish investors has always been that Dish will sell their spectrum," he said. "The auction leaves them looking more like a builder than a buyer."
Contributing editor John Eggerton has been an editor and/or writer on media regulation, legislation and policy for over four decades, including covering the FCC, FTC, Congress, the major media trade associations, and the federal courts. In addition to Multichannel News and Broadcasting + Cable, his work has appeared in Radio World, TV Technology, TV Fax, This Week in Consumer Electronics, Variety and the Encyclopedia Britannica.
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