US to auction airwaves, propose public safety plan

* Auction could start early 2011

* FCC to seek up to $16 bln fund public safety project

* Public safety could access entire 700 megahertz band

WASHINGTON, Feb 25 (Reuters) - A segment of the airwaves that failed to garner enough bids during the 2008 spectrum auction will be offered to commercial carriers possibly early next year, the U.S. Federal Communications Commission said on Thursday.

The segment, called the D-block, is part of the 700 megahertz band of the spectrum that raised about $19 billion for the U.S. government from auctions to carriers in 2008; but the D-Block failed to attract enough bids because carriers did not like some of the conditions for use.

The opening of the D-block could be welcome news for smaller carriers such as T-Mobile, the U.S. unit of Deutsche Telekom AG (DTEGn.DE), seeking to acquire more spectrum to better compete with powerhouses AT&T Inc (T.N) and Verizon Wireless, a venture of Verizon Communications Inc (VZ.N) (VZ.N) and Vodafone Group Plc (VOD.L) (VOD.L).

By deciding what to do with the D-Block, the FCC can move forward with building a nationwide wireless communications system for police, ambulances and firefighters, as well as U.S. and state agencies including the FCC and the Department of Homeland Security, to deal with disasters and emergencies.

Jamie Barnett, chief of the FCC Public Safety & Homeland Security Bureau, said the plan is to also allow public safety workers access to the entire 700 megahertz band when necessary, and carriers which hold licenses in that band will be compensated accordingly.

FCC officials said they will ask Congress to fund the emergency preparedness network, which could cost between $12 billion and $16 billion to build and operate over a period of 10 years.

"The private sector simply is not going to build a nationwide, state-of-the-art, interoperable broadband network for public safety on its own dime," FCC Chairman Julius Genachowski said at a briefing with reporters.

Public safety workers have already been allocated one-eighth of the 700 megahertz band of the spectrum, which was vacated by the broadcasters during the digital television transition. That portion could be developed under a public-private partnership.

Genachowski said the plan includes creating an Emergency Response Interoperability Center at the FCC to establish better communications among the array of emergency workers, including hospitals.

Plans to auction the airwaves and establish an emergency network in the aftermath of the September 11 attacks will be part of recommendations to be made in the National Broadband Plan the FCC will release next month.

The plan will also propose reallocating spectrum, including some held by broadcasters, to wireless companies anticipating a shortage, as more Americans surf the Internet on their mobile devices.

The aim of the national blueprint, which is expected to make short- and long-term recommendations, is to help all Americans get access to broadband and establish very fast Internet speeds in most American households by 2020.

Some portions of the broadband plan may need congressional approval. (Reporting by John Poirier, editing by Gerald E. McCormick)