FCC may auction TV airwaves to wireless carriers

September 7, 2012

The Federal Communications Commission will propose on Friday a plan to auction off television airwaves to wireless carriers that will use them to create faster and more reliable networks, according to an official familiar with the plans.

The sale could potentially raise billions of dollars that would fund a public safety communications network and fatten the coffers of the Treasury.

The FCC’s proposal is expected to outline how broadcasters will voluntarily give up airwaves to win proceeds from the auction, as well as instructions for wireless carriers that increasingly are hungry for more spectrum. The auctions are expected to take place in 2014, the agency official said, speaking on the condition of anonymity because the plans are not public.

The plan will be circulated to the commission’s five members, who will take a vote on the matter at their Sept. 28 public meeting. If approved, it will kick into gear the agency’s first major auction of airwaves since 2008.

That would put high-quality and scarce airwaves into the hands of wireless carriers, which have warned that their networks won’t be able to handle the explosion of Internet traffic resulting from the nation’s growing addiction to mobile devices. Analysts say consumers could see a difference in the quality of their cellular networks in a few years.

It’s a long process, but one that has been eagerly anticipated by Silicon Valley firms, including Google, Intel, Microsoft and the wireless carriers that have lobbied the FCC, the White House and Congress on the matter.

But the process is also rife with potential pitfalls, observers say.

Broadcast TV stations are being asked to voluntarily give up airwaves, and some analysts doubt they will surrender the spectrum easily.

Others worry that dominant carriers will have an unfair advantage in an auction. Consumer groups have argued that the richest carriers — Verizon and AT&T — should not be allowed to buy too much spectrum because of rules that limit the concentration of spectrum holdings in local markets. In the 2008 auction, which raised close to $20 billion for the Treasury, Verizon Wireless ended up winning the biggest chunk of airwaves because of its strong cash holdings.

The FCC on Friday is issuing a separate proposal to reconsider how it measures market concentration of wireless carriers, the agency official said. That proceeding could determine whether the biggest carriers will be excluded from the FCC’s spectrum auction.

Cecilia Kang is a national technology reporter, writing about tech and Internet policies at the Federal Communications Commission and Federal Trade Commission and how regulations affect businesses and consumers.
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