FCC Moves Ahead on Plans to Hold Wireless Spectrum Auction

AT&T balks at reserving space for smaller carriers

Good news for consumers frustrated with dropped calls and slow downloads: The Federal Communications Commission is about to take a major step toward potentially freeing up more spectrum for wireless companies.

The regulatory agency is currently finalizing the rules of the road for the nation's most ambitious auction of wireless spectrum. The auction, set loosely for mid-2015, is no small feat. Complex, with a lot of moving parts, this re-evaluation of the spectrum will be the defining achievement for FCC chairman Tom Wheeler. 

Determined to move the process along, Wheeler on Thursday circulated a report that sets up the auction framework, including details about how TV stations that voluntarily relinquish spectrum will be reorganized and moved to different channels.

The FCC will vote on the final rules for the auction at its May 15 meeting, officials said Friday.

"Getting the incentive auction right will revolutionize how spectrum is allocated," Wheeler wrote in a blog post. "By marrying the economics of demand (think wireless providers) with the economics of current spectrum holders (think television broadcasters), the incentive auction will allow market forces to determine the highest and best use of spectrum."

As part of the incentive auction process, the plan will also carve out more unlicensed spectrum for wifi.

Knowing the ultimate success will depend on broadcaster participation, Wheeler also continued to pitch broadcasters on their options, which include two TV stations sharing a single channel. "Whether television broadcasters participate in the incentive auction will be purely voluntary, but participation in the incentive auction does not mean they have to leave the TV business," Wheeler wrote. "New channel-sharing technologies offer broadcasters a once-in-a-lifetime opportunity for an infusion of cash to expand their business model and explore new innovations."

What the report doesn't address is whether the FCC will attempt to craft rules that would prevent the two biggest wireless companies, AT&T and Verizon, from capturing all of the spectrum to the detriment of smaller competitors. According to recent reports, the FCC is actively considering a proposal that would set aside some spectrum for smaller wireless firms, a proposal that has already stirred up a hornet's nest of controversy. AT&T told the FCC this week it would consider sitting out the auction if such a proposal went through.

"If the restrictions as proposed are adopted, AT&T will need to seriously consider whether its capital and resources are directed toward other spectrum opportunities that will better enable AT&T to continue to support high quality LTE network deployments to serve its customers," wrote AT&T's regulatory vp Joan Marsh.