updated 8/15/2006 8:21:05 PM ET 2006-08-16T00:21:05

A partnership of the two top satellite television companies that qualified as the top potential bidders in the federal government's airwaves auction had all but dropped out of the competition by the close of bidding Tuesday.

Wireless DBS LLC, a partnership between EchoStar Communications Corp. and the DirecTV Group Inc., was the top qualifier for the auction, posting a $972.5 million deposit.

Due to inactivity, the partnership's eligibility to bid on licenses shrunk dramatically. "I think the prices just got too high for them," said Tim Farrar, president of Telecom, Media and Finance Associates Inc., who has been tracking the auction closely.

The auction, which is expected to bring in between $10 billion and $15 billion to the government, got under way Aug. 8.

After 16 rounds of bidding Tuesday, a total of $8.6 billion was pledged for licenses — the rights to the radio spectrum necessary for mobile wireless companies to do business.

Leading the bidding on Tuesday was Verizon Wireless, which held the winning bid of $2.8 billion on four licenses.

Wireless DBS started the auction with 648 million bidding units, a complicated measure of how many potential wireless customers the company can reach. By the end of the day Tuesday, the total was 300,000.

An EchoStar spokeswoman, Kathie Gonzalez, declined to comment.

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