A joint venture between DirecTV Group and Echostar Communications Inc. held the early lead in an auction of public wireless spectrum being conducted by the U.S. Federal Communications Commission (FCC) but fell back after eight rounds of bidding had been completed.

Wireless DBS LLC was the top bidder in the FCC’s Wireless Telecommunications Bureau spectrum auction after five rounds, bidding $352.5 million for 12 licenses. But the company fell back as the auction progressed and by Aug. 14 held the provisional rights to just four licenses with a bid of $60.7 million.

AWS Wireless LLC was the leading bidder, offering $344.1 million for three licenses of bidding, while Spectrumco LLC, a consortium of U.S. cable television companies held the most licenses, bidding $149.9 million for 24 licenses.

Through eight rounds of bids, the auction had raised $1.7 billion. The top bids are provisional and could be surpassed before the auction closes, which is not expected for several weeks. The sale has 1,122 licenses available, and 168 bidders qualified to participate in the auction.

Separately, Echostar and DirecTV reported profitable 2006 second quarters despite a slowdown in subscriber additions at both satellite TV providers.

DirecTV’s profits more than doubled in the 2006 second quarter to $459 million, as revenues improved 10 percent to $3.5 billion, DirecTV announced Aug. 8. In the 2005 second quarter, DirecTV reported a profit of $162 million on revenues of $3.2 billion.

DirecTV attributed the revenue gains to larger subscriber bases at DirecTV U.S. and DirecTV Latin America as well as growth in average revenue per subscriber (ARPU) at DirecTV U.S. These gains were offset partially by the loss of Hughes Network Systems results.

The net income gain was due to improve in operating profit related to an equipment leasing program, higher revenues and reduced subscriber acquisition costs due to lower gross subscriber additions.

Monthly churn dipped to 1.6 percent in the 2006 second quarter, which closed June 30. In the second quarter of 2005, monthly churn was 1.7 percent. Average revenue per user grew nearly 6 percent over the same period.

"In many ways, the results in the quarter reflect our strategy to target higher quality subscribers," Chase Carey, president and CEO of DirecTV Group Inc., said in a statement. "For example, although gross subscriber additions of 863,000 and net additions of 125,000 in the quarter were below expectations, it’s important to note that we added 11 percent more higher quality gross subscribers in the quarter compared to last year. This trend, which is driving both the top-line and bottom-line financial results, is primarily due to the ongoing changes we’re making to refine our credit policy and dealer network."

Echostar reported revenues of $2.5 billion in the 2006 second quarter, up 17 percent from revenues of $2.1 billion in the same period a year ago, Echostar announced Aug. 10.

Echostar’s Dish Network added about 195,000 net new subscribers during the second quarter of 2006, closing the period with 12.5 million subscribers. In the 2005 second quarter, Echostar added 225,000 subscribers to raise its total base to 11.5 million. Echostar attributed the smaller subscriber additions to a slight increase in churn.

Subscriber-related revenue improved from $2 billion in the 2005 second quarter to $2.3 billion in the 2006 second quarter, which closed June 30. Equipment sales were $114.7 million in the most recent quarter, up from $79.3 million a year ago.

Average revenue per subscriber improved from $58.53 in the 2005 second quarter to $62.17 in the most recent three months. Echostar attributed the increase to price increases, higher equipment rental and digital video recorder fees, and revenue from increased availability of standard- and high-definition local channels.

Subscriber acquisition costs were $683 in the 2006 second quarter, down from $692 in the 2005 second quarter.

Echostar posted a profit of $168.8 million in the 2006 second quarter down from a profit of $855.5 million in the 2005 second quarter, which included a non-case gain of about $593 million to recognize a tax gain.