The FCC is currently accepting comments on its proposed rules to implement the auction. The commission aims to hold the auctions by 2014, to set aside some spectrum for unlicensed use and to protect competition in the wireless industry.
At Wednesday's hearing, Republicans worried that the commission will reserve too much unlicensed spectrum, which can be used by any company for free.
Unlicensed spectrum supports technologies such as WiFi, and FCC Chairman Julius Genachowski argued that additional unlicensed spectrum will allow for new technological innovations.
"Unlicensed spectrum has a powerful record of driving innovation, investment, and economic growth – hundreds of billions of dollars of value creation for our economy and consumers," Genachowski testified.
Walden said he believes that some unlicensed spectrum is important to allow for innovation and to power WiFi networks, but he worried that the FCC is going too far.
"What I cannot support is the unnecessary expansion of unlicensed spectrum in other bands needed for licensed services, especially at the expense of funding for public safety," he said.
Walden estimated that the FCC's plan to reserve unlicensed spectrum blocks could cause the federal government to forgo an estimated $7 billion in revenue.
"These are big numbers we're talking about — even for Washington," Walden said.
Democrats voiced support for the FCC's unlicensed spectrum plan.
Rep. Henry Waxman (D-Calif.), the ranking Democrat on the full Energy and Commerce Committee, said unlicensed spectrum has been an "incredible economic success story" and that additional unlicensed spectrum will allow businesses to "invent things we can't even imagine."
Rep. Anna Eshoo (D-Calif.), the subcommittee's top Democrat, said Republicans were putting too much emphasis on maximizing government revenue at the expense of pursuing policies that would benefit the industry and consumers.
"Last time I checked, this is the Energy and Commerce Committee, not the Budget Committee," she said.
The Republicans also expressed concern that the FCC's efforts to promote competition will reduce auction revenue.
The FCC wants to ensure that industry giants AT&T and Verizon don't buy-up all of the available spectrum, but the Republicans cautioned the FCC not to pick winners and losers in the auctions.
Republican FCC Commissioner Robert McDowell testified that a cap on the spectrum that any one company can win at auction could "create harmful uncertainty and may reduce the pool of auction participants."
Rep. John Dingell (D-Mich.) urged the FCC to protect local TV broadcasters to ensure that viewers can continue to have access to news that affects their community.
"We in the border states are very much concerned about what could or will happen to us in this process — losing service, seeing stations go dark," he said.