As the historic federal auction for wireless spectrum heats up and the proverbial wheat begins separating from the chaff, the first major victim of the escalating bidding war seems to be the satellite TV consortium composed of DirecTV and DISH-parent EchoStar. Combining their resources in the Advanced Wireless Services auction as a limited liability corporation known as Wireless DBS, the two companies were hoping to pick up a chunk of spectrum that they could use to offer WiMax broadband services to customers and compete directly with telcos offering so-called "triple-play" packages; currently, the two sat TV providers have only been able to offer Internet service through partnerships with established broadband carriers. Apparently the billion dollars that Wireless DBS was willing to spend ended up not being enough to cover the requisite regional licenses they would need to offer nationwide service, as the cost for such such complete coverage is now anticipated to be at least $4 billion. The next move for the satellite providers could involve either partnering up once again with a company like Clearwire, or waiting until next year to bid in the 700MHz auction -- but that auction could see even higher bids, and the resulting spectrum would be unavailable for use until 2009. Sorry guys, we know how badly you wanted this one, but when you come to a gun fight equipped with nothing but a pocketknife, well, things are bound to end pretty poorly.

[Via Techdirt]