An auction of wireless airwaves could create a new breed of wireless players that lease network space to upstartsExecutives at TerreStar spent their long Thanksgiving weekend sizing up more than just second helpings of turkey. The tiny mobile network operator is considering a run for assets that would help it blaze a cellular communications trail.
TerreStar may participate in a government auction for wireless airwaves scheduled for January. But unlike other potential buyers, such as Verizon Wireless, that would use the spoils to bolster their own cellular services, TerreStar (TSTR) would use acquired spectrum to do something unheard of in telecom: become a wholesale provider of wireless network capacity. Companies such as Level 3 Communications (LVLT) and Global Crossing (GLBC) carry out a comparable function in the area of fiber-optic networks, but they're peerless when it comes to wireless.
Not if TerreStar and a handful of other would-be bidders can help it. Regulatory filings show that representatives of TerreStar, Frontline, and Mobile Satellite Ventures have all met with Federal Communications Commission officials in recent weeks with an eye to either participating in the auction or joining forces with a winner. Any one could become a wireless wholesaler that leases its network to mobile-phone service providers, technology companies, government agencies, or other entities that want access to cross-country wireless networks.
Read More
