Crown Castle bails from mobile TV effort, Modeo’s fate unclear

Crown Castle International Corp. is spinning off its Modeo business, agreeing to lease Modeo’s nationwide spectrum for a dedicated mobile broadcast network to a pair of venture capital firms.
The Houston-based tower company said it will rent the spectrum for $13 million a year to a venture formed by Telcom Ventures L.L.C. and Columbia Capital L.L.C. effectively immediately. The joint venture will have the right to acquire the spectrum or renew the lease for another 10 years under the same terms beginning in 2013.
The lease agreement includes assets related to Modeo’s DVB-H trial network in New York.
Crown Castle said it will take a one-time hit of $10 million in “operating and general administrative costs” related to its aborted Modeo business, and will write off all its Modeo assets other than spectrum in the third quarter of this year.
How the joint venture will use the spectrum, though, remains a mystery. A Crown Castle executive referred all questions regarding the fate of the spectrum to the two venture firms involved in the deal, and representatives from both Telcom Ventures and Columbia Capital were not immediately available for comment.
Modeo’s Web site was down after the announcement, redirecting traffic to Crown Castle’s site.
Crown Castle is a longtime player in the cell-tower industry, but the company’s exit from the mobile television network space is no surprise. Crown Castle’s Modeo effort failed to move beyond the experimental stage, while Qualcomm Inc.’s MediaFLO USA Inc. business is only a few months away from its second carrier deployment. And analysts agree that finding a viable business model without a wireless partner will be a challenge for operators of mobile multimedia networks.
“In the U.S. market, as of now, MediaFLO is on the verge of running away with the market,” said Vinod Valloppillil, VP of product marketing for Roundbox Inc., in an interview with RCR Wireless News earlier this month.
The only other mobile TV competitor is Aloha Partners L.P., which is building the HiWire network. The company is still in the testing stage, and recently announced a lineup of 24 channels for its Las Vegas trial.
While the aim of the Telcom Ventures-Columbia Capital joint venture is unclear, it may look to tweak Crown Castle’s service but continue to target wireless users with entertainment content. Both Telcom Ventures and Columbia Capital have invested substantial amounts in XM Satellite Radio Inc., and Columbia’s mobile investments include Amp’d Mobile, broadband chipmaker Sandbridge and the wireless advertising startup Millennial Media.