As the U.S. Federal Communications Commission wireless spectrum auction commenced Wednesday, the major wild card among the bidders was SpectrumCo., a consortium of three cable operators and SprintNextel.

Sprint

SpectrumCo., a joint venture of cable leaders Comcast, Time Warner, and Cox Communications along with Sprint, made the second-largest advanced bid, which was over $637 million.

Comcast

But SpectrumCo. has been silent about its intentions, leaving analysts to speculate on the plans of the unusual joint venture.

SpectrumCo. was made all the more intriguing after Sprint Nextel’s announcement Tuesday that the third-largest mobile operator in the United States will invest about $3 billion in a nationwide WiMAX network (see Sprint Commits $4B to WiMAX).

Shares of Sprint Nextel rose $0.37 to $17.00 in recent trading, while Comcast shares climbed $0.45 to $34.70, and Time Warner shares dropped a penny to $16.18.

Home Competition

On the surface, the announcement seems to place Sprint in competition with its cable company partners, as one version of WiMAX will deliver broadband services to the home.

When the question was posed to Sprint CEO Gary Forsee at a press conference Tuesday, he declined to comment on the matter.

Analyst Joe Nordgaard believes there are advantages to be gained by cable companies in terms of using wireless to fill in gaps in their coverage areas.

“There are customers in the cable companies’ regions that they are not able to service, and wireless helps them to make that happen,” said Mr. Nordgaard, director of Spectral Advantage.

“There could also be out-of-market offerings in things like VoIP and high-speed data in conjunction with Sprint,” he added.

Manish Gupta, vice president of marketing and alliances for WiMAX startup Aperto Networks, concurred.

Mr. Gupta believes the coalition presents immense potential for integrated wireless/wireline services in and out of the cable companies’ coverage areas.

“There are many possibilities in the cable/Sprint partnership,” said Mr. Gupta. “For instance the cable companies can use Sprint’s WiMAX network for backhauling [moving] traffic.”

“Fixed WiMAX is competitive with cable modems to the home, but the business around the two connections does not have to be competitive,” he added.

Auction by the Numbers

The FCC announced 168 applicants it found to be qualified to bid in the upcoming auction of Advanced Wireless Services licenses in the 1710-1755 megahertz (MHz) and 2110-2155 MHz bands.

Nine applicants submitted advanced bids of over $100 million. Wireless DBS LLC submitted the largest advanced sum at more than $972 million.

SpectrumCo. was next with $637 million, followed by T-Mobile at $583 million, and Cingular at $500 million.

Verizon Wireless was next at $383 million, followed by Cricket Licensee at $255 million, MetroPCS at $200 million, the Dolan Family Holdings (Cablevision) at $149 million, and AWS Wireless at $142 million.

Wireless was next at $383 million, followed by Cricket Licensee at $255 million, MetroPCS at $200 million, the Dolan Family Holdings (Cablevision) at $149 million, and AWS Wireless at $142 million.

Contact the writer:CMedford@RedHerring.com