By Christopher J. Kardish, Principal Research Analyst

Next to traditional mobile phone carriers, the biggest winner from the recent FCC auction for Advanced Wireless Services (AWS) frequencies was SpectrumCo LLC. SpectrumCo LLC is a joint venture of Comcast Corp. [52%](NASDAQ:CMCSA, CMCSK), Time Warner Cable [29%](NYSE:TWX), Cox Communications Inc. (Private), Bright House Networks (Private (JV of TWX and Advance)), and Sprint-Nextel Corp (NYSE:S). Cable companies providing voice services using Voice over IP (VOIP) see WiMAX, which will run on the AWS frequencies, as the natural next step for them.

So why is Sprint/Nextel there? Sprint/Nextel already plan to use WiMAX on their 2.5GHz frequencies, which cover 85% of households in the top 100 US cities – pretty much the same coverage as SpectrumCo, and Sprint/Nextel already has good VOIP infrastructure.

The cable companies’ key offer is location. The basic cell network model is to install as few towers as possible to provide service to lots of subscribers. This works well in wide-open flat places, but no so well in rolling, tree-covered hills. Historically, cell companies have filled coverage gaps by boosting power, or adding more high powered towers, which are not very efficient uses of energy or money.

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