FCC approves rules for airwaves auction

By | Wednesday, August 1, 2007

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The Federal Communications Commission approved rules yesterday intended to give people more choice on their cell phones and wireless devices after a pivotal airwaves auction next year.

The vote clears the way for the auction, which is expected to raise as much as $15 billion.

The FCC approved a much-debated "open access" provision, pushed by Chairman Kevin J. Martin, a Republican, and supported by the agency's two Democrats, that will allow customers to use whatever phone and software they want on about one-third of the spectrum to be auctioned.

A more ambitious provision that would have required a licensee to sell access to its network on a wholesale basis was not included in the rules. That makes it unlikely that Google Inc. will bid. Google had been expected to challenge traditional wireless companies if the rules had been favorable.

The rules also will allow for the creation of a shared public safety network that commissioners hope will solve many of the communication problems that firefighters and other first responders have experienced during disasters like the September 11, 2001, terrorist attacks.

The vote was not unanimous. Republican Commissioner Robert McDowell dissented on the open access provision, his first "no" vote since joining the commission. Republican Deborah Taylor Tate also expressed concerns about the provision, but she did not oppose it.

The two Democrats, Michael Copps and Jonathan Adelstein, would have preferred the rules to have included the wholesale concept sought by Google and consumer groups. Still, they ended up supporting the final rules.

The text of the rules was not released at yesterday's meeting. The language in the document ultimately will determine which investors will commit billions of dollars to develop new wireless networks and which may not bid at all.

The spectrum to be auctioned has been praised for its ability to travel long distances and penetrate walls easily — the same characteristics that made it attractive to broadcasters that are vacating it to make way for all-digital television.

The Congressional Budget Office estimates the auction's proceeds will amount to between $10 billion and $15 billion.

A total of 62 megahertz will be auctioned under the plan. Twenty-two megahertz will be subjected to the "open access" rules being pushed by Mr. Martin. Another 10 megahertz will be dedicated to the national public safety network, which will be shared between a commercial operator and public safety agencies.

Mr. Martin said he tried to "strike an appropriate balance" with the new rules, noting the criticism from his fellow commissioners.

The spectrum will be occupied by television broadcasters until February 2009. The winning bidder or bidders then have to "build out" the network. That could take several years and billions of dollars.

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