Qualcomm (Nasdaq: QCOM) is in talks with AT&T (NYSE: T) over the potential sale of wireless spectrum the chipmaker acquired to roll out its ill-fated FLO TV mobile broadcast effort. Citing two sources with knowledge of the discussions, Bloomberg reports Qualcomm has discussed selling the spectrum to multiple carriers, although sources indicate neither Verizon (NYSE: VZ) Wireless nor T-Mobile USA is currently in deal talks. "We are in discussions with a variety of interested parties and are continuing to evaluate other options," Qualcomm's senior vice president of investor relations Bill Davidson tells Bloomberg, while AT&T declined to comment; Qualcomm chairman and CEO Paul Jacobs has previously said the firm is exploring a range of options for the FLO TV business, including a joint venture.

FLO TV features simulcast and time-shifted broadcast content from partners including ABC, CBS, NBC, Fox, ESPN, MTV and CNN. Subscriber numbers are unknown. Initially available only in limited markets, FLO TV went nationwide in mid-2009 in conjunction with U.S. broadcasters' long-planned transition from analog to digital, which freed up the necessary spectrum. Qualcomm reportedly spent $683 million acquiring the spectrum to run FLO TV, stating it would invest about $800 million in total (including spectrum, network build-out and marketing costs) to launch the service. Gleacher & Co. analyst Mark McKechnie forecasts the FLO spectrum could fetch as much as $1 billion on the open market: "It's got to be worth more now; they got that spectrum before the [Apple (Nasdaq: AAPL)] iPhone came out," McKechnie tells Bloomberg.

Last month, Qualcomm confirmed reports it will shutter FLO TV, halting direct-to-consumer sales of new devices but committing to delivering programming to existing subscribers through the spring of 2011. Qualcomm said the white-label FLO TV services offered by AT&T and Verizon Wireless remain unaffected, at least for now. "In the event of a discontinuance of service, FLO TV will make appropriate refunds, the details of which will be communicated prior to discontinuation," the company said. Qualcomm expects its exit from the FLO business to incur charges between $125 million and $175 million in fiscal 2011.

Qualcomm first acknowledged plans to divest FLO TV in late July; Jacobs said at the time the company was exploring "a number of alternatives" for the unit, including discussions with prospective partners. At Qualcomm's Uplinq 2010 developer conference in San Diego a few weeks prior, Jacobs explained it was never the firm's intention to become the service provider operating the FLO broadcast network.

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