NEW YORK — Nascent high-def satellite broadcaster Rainbow DBS, a unit of New York-area cabler Cablevision, won two satellite orbit licenses Wednesday from the FCC in an auction that fetched $6.4 million.
After two rounds of bidding, Rainbow emerged as winner of an eight-year license for 32 channels at 175 degrees and 32 channels at 166 degrees, allowing coverage of the Western edge of the U.S.
EchoStar was the other bidder on the 166-degree slot but bailed out early, instead taking 29 channels at 157 degrees for $5.8 million. An EchoStar spokesman said the company will use the capacity for additional channels.
Auction was the first for orbital slots since 1996, when three orbit licenses went for $24 million apiece.
The relatively small price paid represents a bargain for Charles Dolan, who has said he would spend $482 million getting satellite TV service Voom off the ground.
Rainbow launched its first satellite, Rainbow 1, last year, but the bird doesn’t cover the entire U.S., forcing Voom to lease capacity from other satellite operators. Company spent $85 million in January on terrestrial broadcast licenses that could be used to fill coverage gaps or provide two-way data capacity.
A Cablevision spokesman wouldn’t say what the satcaster will do with the extra orbit slots.
In May, Cablevision filed papers to spin off Rainbow Media Enterprises, a unit including the national cable networks IFC, AMC and WE: Women’s Entertainment, and Voom, which is contingent on new financing.
Until then, analysts fear, Cablevision will be footing the bill. “We believe that Cablevision would likely be the source of funds until a new capital structure can be secured for Rainbow Media Enterprises,” Merrill Lynch’s Jessica Reif Cohen wrote in a research note.