America's biggest cable TV operator says it has other options

The auction - which will start at $4.6bn (�2.2bn) - is seen as the last opportunity for a new player to enter the wireless market.

Google has announced its intention to bid in the auction.

Shares in Comcast and Time Warner Cable rose on news they would not bid in the auction - alleviating analyst fears of an expensive purchase.

Free capacity

Shares in Comcast ended up 65 cents at $20.86 while shares in Time Warner Cable were up 84 cents at $26.87.

The planned transition to digital TV services in the US has freed up the wireless capacity, which the Federal Communications Commission will auction in January.

Part of the spectrum, called the C Block, will be free from early 2009.

Google hopes that the new network capacity will allow it to compete directly with existing mobile communications companies.

Eric Schmidt, Google chief executive, has promised that whoever wins the auction US consumers would "see more choices than ever before in how they access the Internet".

Comcast exit

For Comcast, the largest US cable operator, participation in the auction was a luxury analysts feared it could not afford.

The cable operator is already part of a consortium that bought wireless spectrum last year and "has many strategic options," it said in a statement.

"I think it is going to be an expensive auction and it's rigged towards the incumbent phone companies, so it's nice to see Comcast remove itself," Todd Mitchell, analyst at Kaufman Bros, told Reuters.

Analyst Thomas Eagan added: "Investors were previously concerned about the potential for significant spending, not only in the auction but also on a network build-out."

Other expected bidders include AT&T and Verizon Wireless.