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FCC Sets Tuesday Vote on Auction Rules

After months of intense lobbying by the technology and telecom industries, the Federal Communications Commission (FCC) will vote Tuesday on the rules for the January 700MHz spectrum auction. The auction is expected to bring as much as $20 billion to the federal coffers.

The spectrum is highly prized for its ability to deliver wireless broadband and other advanced services. Since Congress last year ordered television broadcasters to clear the spectrum by early 2009 as part of the digital television transition, who will bid on the airwaves and under what conditions have been the source of considerable speculation.

Incumbent carriers like AT&T, Verizon and Sprint once thought they would have the best shot at the spectrum in a high-bid, winner-take-all auction. But FCC Chairman Kevin Martin startled the incumbents earlier this month by circulating draft auction rules calling for an open-access platform for a third of the spectrum for sale.

"The upcoming auction provides a rare chance to promote a more open platform without disrupting existing networks or business plans," Martin said Tuesday at a U.S. House hearing on the sale.

Martin hopes the conditions will help spark a third competitor to incumbent telephone carriers and cable companies for wireless broadband services. Currently, the telcos and cable companies control 98 percent of U.S. broadband connections.

Martin's proposal opens the door for a possible bid by search and advertising giant Google, which has said it would participate in the auction if the FCC conditioned the sale on the winner providing an open access network that would also be available for others at wholesale rates.

The current proposal, though, falls short of meeting Google's conditions since Martin opposes the wholesale aspect. Martin's plan would allow consumers to connect any legal device and run any legal application to the wireless network. The rules for the spectrum would also contain prohibitions against the network provider blocking legal content.

"I have not proposed to apply these same principles to the entire 700MHz band or to existing networks," Martin said Tuesday. "Nor have I proposed to apply network neutrality obligations or mandatory wholesale requirements for this block or any other block."

Martin's fellow FCC commissioners are expected to continue debating the conditions of the sale and are subject to negotiations between the three Republicans and two Democrats on the panel. Martin needs three votes to sell the plan.

At Tuesday's House hearing, the commissioners were evasive about where they stood on the auction rules.

"My goal is to provide an auction structure that promotes opportunities for all bidders, including new entrants as well as existing providers," Commissioner Jonathan Adelstein, a Democrat, said. "I am also interested in identifying spectrum on which to establish a meaningful open-access environment. Such a proposal could open these key airwaves to badly needed competition in the broadband space."

Fellow Democrat Michael Copps said, "By any measure, we're getting too little broadband at too high a price. If we get this right, this auction offers the prospect of new competition, innovation and consumer choice – perhaps even a third broadband pipe."

Republican Robert McDowell added he was "actively considering many ideas" while fellow Republican Deborah Taylor Tate sidestepped the issue.