Consumer groups have asked federal regulators to block Qualcomm’s proposed sale of wireless spectrum from its failed Flo TV service to AT&T.

The groups claim that AT&T and Verizon Wireless dominate the mobile broadband market in the U.S. and selling the spectrum would further increase AT&T’s market power.

“Today’s filing calls upon the Federal Communications Commission to recognize that continued consolidation of spectrum in the hands of the two largest mobile broadband providers does not serve the public interest,” said Matt Wood, associate director of the Media Access Project in Washington, D.C., in a statement.

Media Access joined Free Press, Public Knowledge, Consumers Union and the New America Foundation’s Open Technology Initiative in filing a petition to stop the sale.

AT&T didn’t comment. But a spokeswoman pointed to the company’s application with the FCC seeking approval of the deal to explain its position. The carrier plans to use the spectrum for a high-speed 4G network based on Long Term Evolution, or LTE, technology.

“Consumers will enjoy a faster and better experience over AT&T’s LTE network than would have been possible absent this transaction, and the spectrum now licensed to Qualcomm will be used in a highly efficient

manner to support the demand for mobile broadband,” the company said. “Moreover, these benefits will be achieved without any harm to competition, making this transaction in the public interest.”

Spectrum is the airwave frequencies that carry wireless voice and data. Supply is limited, making it valuable. Qualcomm agreed to sell the nationwide spectrum to AT&T for $1.925 billion.

Qualcomm’s Flo TV delivered more than 20 TV channels to cell phones and other devices. But it had fewer than 1 million subscribers after three years in business. So Qualcomm is shutting down the service. It is working with AT&T to develop a way to link the former Flo TV spectrum, which has limitations, with a different piece of AT&T spectrum to enable mobile broadband.

The consumer groups claim that AT&T and Verizon already have more prime 4G spectrum than rival wireless carriers. “Stockpiling more spectrum may be good for AT&T’s bottom line, but it does nothing to promote competition, innovation and free expression on mobile broadband platforms,” said Wood.

NEW YORK (Dow Jones)–AT&T Inc. (T) will pay $1.93 billion for a swath of spectrum licenses from Qualcomm Inc. (QCOM) as AT&T looks to bolster its fourth- generation service while Qualcomm shutters its FLO TV service.
The deal frees up valuable wireless spectrum for AT&T to deploy as part of its fourth-generation network, while allowing wireless-chip maker Qualcomm to stop investing in its struggling mobile broadcast video service. While Qualcomm has been benefiting from its exposure to smartphones, the FLO TV business has been disappointing and has weighed on results.
“FLO TV has been a thorn in investors’ sides for a long time,” Bernstein analyst Stacy Rasgon said. He added that Qualcomm is making a good return on its investment of about $700 million for the spectrum. “I’m glad to see them get out of it.”
Qualcomm shares, up 7% this year, edged up 1% to $49.94 premarket, while AT&T, up 4.2% this year, grew 24 cents to $29.45.
Qualcomm in October said it would suspend sales of devices for FLO TV–which delivers video to cellphones using a broadcast network–but that customers would continue to receive programming into the spring.
The company then said during its fourth-quarter results in November that it would be exiting the business and that it was considering several options for FLO TV, including setting up a joint venture or selling the spectrum licenses.
Qualcomm disclosed Monday that FLO TV will be shut down in March. The company had already disclosed restructuring charges of up to an estimated $175 million related to the October announcement, and the figure is expected to grow.
The company wasn’t immediately available to comment further.
AT&T is buying spectrum licenses in the lower 700MHz frequency band. It plans to deploy the spectrum as part of longer-term plans for its fourth-generation network, once “compatible handsets and network equipment are developed.” The companies expect the sale to close in the second half of 2011.
The price AT&T paid for the spectrum is similar to or lower than comparable spectrum prices, AT&T spokesman McCall Butler said.
Wireless carriers more and more are putting their irons in the 4G fire as they continue to try to lure customers away from one another by racing to put out the latest in technology. Fourth-generation wireless technology is significantly faster than 3G, which is mostly the standard for smartphones.
The move is also forward-looking for AT&T because of the major-city concentration of the spectrum. AT&T has been the subject of much complaining about its service in major cities for the wildly popular Apple Inc. (AAPL) iPhone, which is heavy on data usage. Plans for a 4G iPhone haven’t been announced.

The basic concept behind FLO TV is cool: Use a separate network to deliver high-quality, live mobile television to phones. The reality, however, didn’t work out as planned or hoped.

Qualcomm launched FLO TV way back in March of 2007 with just one handset available from Verizon Wireless in a very small number of markets. Over time, FLO TV became available on more handsets and in more markets, but the service never really caught on. Carriers stopped bringing FLO-enabled devices to market some time ago.

FLO also offered stand-alone mobile TV products, and pitched them to families looking to entertain kids while in the car. The devices themselves weren’t bad, but the service always required an additional monthly fee.

Qualcomm and its partners have been shy about sharing FLO numbers until Jacobs appeared at an event Tuesday evening with former Palm CEO Jon Rubinstein. When asked how many customers used its FLO services, Jacobs said about a million. When you consider the billions of dollars that Qualcomm paid for the spectrum, the towers, the network, and the content deals, it’s no surprise that Qualcomm is calling it quits and looking to sell. (Jacobs told The Wall Street Journal that he expects to strike a deal regarding FLO in the next quarter or so.)

Jacobs said the company learned some key things during FLO’s run. Chief among them is that people were more interested in events (concerts, sporting matches, etc.) and time shifting than they were in live TV. “Nobody turned on their phone at 4:30 to watch show X for half an hour,” Jacobs said. “That was a total non-starter.”

Cost was also probably an issue. The basic access plan for FLO TV started at $10 per month. I’d argue that the emergence of smartphones such as the iPhone and Android — which are adept at playing back video content — also helped reduce the appeal of FLO TV.

Jacobs still believes that mobile TV will become the norm. “It’s just a question of how it’s going to happen,” he said.

Linkmedia, a Taiwan-based company preparing to provide MediaFLO mobile TV services in the Taiwan market through technological cooperation with Qualcomm, has decided to give up the project mainly because of unfavorable external factors, according to the company.

Qualcomm, the developer of the MediaFLO standard, has decided to end operation of FLO TV services in the US market at the end of 2010 and failed to obtain a MediaFLO mobile TV license in Japan or Hong Kong, according to industry sources in Taiwan. This is one of two main unfavorable external factors, the sources said.

The other factor is that Taiwan’s National Communications Commission (NCC), after issuing five mobile TV trial operating licenses, has not yet announced its plans to issue formal operating licenses since the end of the trial operation, the sources indicated.

We’ve been more than a little dismissive of Qualcomm’s FLO TV Personal Television, with SlashGear columnist Michael Gartenberg summing up most of our doubts when he asked why you’d want to carry a separate, dedicated device. Now, thanks to a deal with mophie, the FLO TV prospect has just got a whole lot more interesting: iPod touch and iPhone juice pack sleeves that add not only a backup battery but FLO TV live television receiving on the Apple handhelds.

While several cellphones in the US are capable of receiving FLO TV broadcasts – which are transmitted live in their own chunk of spectrum, rather than delivered over the 3G networks – the iPhone is not one of them. This new mophie adapter opens up FLO TV to a huge, dare we say accessory-voracious market of Apple fans.

There’ll be a subscription fee involved, obviously, which right now neither company are coming clean on; we’re guessing it’ll be around $8.99 per month based on a two-year contract, just like the standalone viewer. Expect the FLO TV mophie juice pack to arrive in the US in the first half of 2010, price to be confirmed.

LOS ANGELES (Hollywood Reporter) – Disney Channel and ABC have embraced FLO TV, the nation’s primary provider of hand-held, portable television.

With ABC on board, the Qualcomm service can boast of offering the programing of the four major broadcast networks.

FLO TV launched in 2007 on Verizon and last year on AT&T. NBC ToGo, CBS Mobile and Fox Mobile always have been part of the core offering, which ABC Mobile now joins.

The service, which comes in several consumer packages involving different carriers and mobile devices, costs consumers a minimum of $8 a month.

Disney isn’t a FLO TV novice; its ESPN Mobile TV already was part of the service.

The deal, set to be announced Tuesday, includes the mobilized feed of ABC and a simulcast of Disney Channel. Reruns will air in place of the occasional third-party movie where mobile rights haven’t been secured.

Qualcomm doesn’t reveal details of the financial relationships it has with the Big Four networks, but “there are parallels you can draw between our deals and affiliate deals,” said Jonathan Barzilay, senior vice president of programing and advertising at FLO TV.

With ABC and Disney Channel, FLO TV’s core offering expands to 17 channels; AT&T Mobile Television and Verizon V Cast offer an additional couple of exclusive channels for their basic products.

Qualcomm’s FLO TV makes a bid to become the mobile TV king
Bill Stone, president of Qualcomm’s FLO TV division, is making a huge bet that users won’t mind paying for mobile TV subscriptions to view shows on their tiny screens.

Speaking at the Streaming Media West show in San Jose, Calif. today, Stone said Qualcomm has collectively invested more than a billion dollars in lining up the digital spectrum license and other infrastructure to make the company’s live mobile digital broadcast TV service a reality. That investment includes the launch of FLO TV Personal Television (pictured), a handheld device that can play live and prerecorded broadcasts of news shows, sports, movies, and TV shows. The device went on sale Friday for $249.99. That comes with six months of free monthly service, which costs $10 a month.

It remains to be seen if FLO TV, which Qualcomm has been trying to kick start since 2005, will take off. The company doesn’t say exactly how many people are using the service on the Verizon and AT&T phone networks, but it does say the number of subscribers is in the millions. Stone said the service will also generate advertising revenue over time.

If all goes as planned, the market could be big. ABI Research estimates mobile TV will have 43 million subscribers by 2013.

One of the advantages that FLO TV has is its higher video quality. FLO TV can squeeze 20 channels into its bandwidth — which was previously the UHF channel 55 — and there is no buffering or lag time that frustrates users of most cell phone video services. Stone said that the Michael Jackson memorial service was FLO TV’s biggest event so far and that the average viewer watched for 49 minutes.

Any FLO TV-enabled device (including Qualcomm phone models on the Verizon and AT&T networks as well as the dedicated Personal Television) can pull the TV programming in over the air from Qualcomm’s digital broadcast network. They don’t, therefore, need to have a specific dedicated video stream sent from one place on a network to another. It is a one-to-many technology, not one-to-one. That’s the problem with current video services that are sent over cell phone networks. When the connections have to be made on a one-to-one basis, it’s easy to overwhelm the networks. That’s because video often consumer about 100 times more data networking bandwidth than a simple phone call.

On average, viewers watch FLO TV for 30 minutes a day while commuting, sitting at their desks, or waiting in line. The service is available in more than 100 U.S. cities now.

In the next month, FLO TV will also launch an auto entertainment service for devices that can be placed in the back seats of cars. Over time, FLO TV will launch more local and original programming and proliferate to a larger number of devices and smart phones, Stone said.

Here’s a video of Stone talking about FLO TV and showing off the new handheld device.

Bill Stone, president of FLO TV, talks about mobile TV handheld from Dean Takahashi on Vimeo.

Qualcomm (NSDQ: QCOM) made its FLO TV mobile television device available at retail outlets Friday and likely began holding its breath to see whether it becomes popular with consumers.

The handheld FLO TV Personal Television has a retail price of $249.99 and will include six months of FLO TV service. The device will be available at retailers includingAmazon (NSDQ: AMZN).com, Best Buy (NYSE: BBY), and Radio Shack.

“The FLO TV Personal Television is a dedicated device for consumers’ on-the-go lifestyle,” said FLO TV president Bill Stone in a statement. “It also adds another way for consumers to use the FLO TV service, in addition to a variety of handsets and our recently introduced FLO TV Auto Entertainment system.”

The 3-inch by 4.4-inch by 0.5-inch device weighs slightly more than 5 ounces and features a capacitive touchscreen with an oleophobic glass lens for its 3.5-inch QVGA display. Available TV channels include Adult Swim Mobile, CBS Mobile, CNBC, Comedy Central, Fox News, MSNBC, MTV, NBE 2Go, and Nickelodeon. The service is available over a dedicated multicast network that enables millions of watchers to view programs simultaneously. Previously FLO TV said the service would carry a $15 monthly charge.

FLO TV said the device has a long battery life — 5 hours of viewing time and 300 hours in standby.