Smaller cell carriers urge Congress to give FCC flexibility in spectrum auctions

By Brendan Sasso - 02/08/12 03:55 PM ET

A coalition of wireless carriers urged Congress on Wednesday to give the Federal Communications Commission (FCC) flexibility in how it manages proposed auctions of wireless airwave licenses, widely known as spectrum.

The companies signing onto the letter included Sprint and T-Mobile, as well as regional carriers such as Atlantic Tele-Network, Bluegrass Cellular, C Spire Wireless, Cricket Communications and NorthwestCell.

The groups warned that tying the FCC's hands would allow "the two largest, best-funded wireless carriers" to buy up all of the available airwaves in the auctions.

Verizon, the largest carrier, has largely stayed out of the debate over spectrum auctions, but the second-largest carrier, AT&T, is lobbying Congress to set strict rules for the auctions.

AT&T argues the FCC should not be able to pick winners and losers in the auctions, but FCC officials, including Chairman Julius Genachowski, say the agency should be allowed to set conditions that preserve competition in the wireless industry.

AT&T supports the House GOP version of the spectrum bill, which restricts the FCC's ability to impose conditions on the companies that buy the spectrum and would prohibit the FCC from designating additional spectrum for unlicensed use.

A congressional conference committee could include the legislation, which could raise billions of dollars in auction proceeds, as part of a package to extend the payroll tax cut.

In their letter to conference committee lawmakers, the smaller firms urged Congress to set up the spectrum auctions, but said the House legislation "would substantially limit the FCC’s ability to promote competition and a competitive wireless marketplace for consumers throughout America."

In a blog post Wednesday, Jim Cicconi, AT&T's vice president of legislative affairs, said the smaller companies want the FCC to "stack the deck" in their favor.

“Auctions should be open, not closed," he wrote. "Any qualified carrier, including those on today’s letter, should have a chance to bid on any spectrum available in an auction."

He said the group's proposal "could not be called an auction with a straight face" and would cost the Treasury billions of dollars.

The smaller companies argued that restricting the FCC would reduce revenue in the long-run by limiting competition and discouraging smaller firms from participating in future auctions.