UPDATE 1-U.S. FCC delays incentive auction of airwaves to mid-2015

Fri Dec 6, 2013 3:28pm EST

By Alina Selyukh

WASHINGTON Dec 6 (Reuters) - The U.S. Federal Communications Commission, as long predicted, now plans to hold the so-called incentive auction of broadcast airwaves in mid-2015, a year later than originally intended, the agency chairman said on Friday.

The FCC is now drafting rules for the auction that would reshuffle the ownership of valuable frequencies among TV stations, as well as wireless carriers, which are clamoring for faster speeds and better services for their devices.

"I believe we can conduct a successful auction in the middle of 2015," FCC Chairman Tom Wheeler said in a blog post on Friday. (fcc.us/19m1fvB)

As part of this reverse auction, the FCC would pay broadcasters to voluntarily give up control of low-frequency airwaves so that they can be sold to telecommunications companies such as Verizon Communications Inc, AT&T Inc , Sprint Corp and T-Mobile US Inc..

The auction is widely regarded as the most complex undertaking by the FCC to date, balancing numerous economic, engineering and political considerations, including a vocal push from smaller carriers for limits to how much spectrum their larger competitors will be allowed to acquire.

"The enormous complexity of this task cannot be overstated," Joan Marsh, AT&T's vice president of federal regulatory affairs, said in a statement on Friday.

"While AT&T is eager to see new spectrum allocations brought to market as soon as practical, we appreciate the enormity of the task the commission faces and believe that it is essential that time be taken to get it right," Marsh said.

The FCC launched the planning for the incentive auction under its previous chairman, Julius Genachowski, with the hope of completing it by 2014. But the complexity of the task had long spurred predictions of a delay.

"Given the complexity of the auction and its many moving parts, the most important goal is to get the auction done right," National Association of Broadcasters President and Chief Executive Gordon Smith said in welcoming the new timeline.

AT&T and Verizon, two biggest U.S. carriers, currently control the biggest portion of the frequencies under one gigahertz, the part of the spectrum that is the subject of this auction and valued for its strength and reach.

Sprint, T-Mobile, regional carriers and satellite company Dish Network Corp have urged the FCC to ensure they get their share of this spectrum.

The question of whether the FCC should restrict AT&T's and Verizon's participation in the auction has turned into a fierce back-and-forth, fueled particularly by the Department of Justice's controversially siding with Sprint and T-Mobile and saying that caps would ensure competitiveness.

The biggest carriers have argued that setting limits unique to just two companies would be a regulatory overreach and that caps may dampen how much the FCC raises in the auction.

The auction proceeds are required to pay broadcasters as well as help fund a new $7 billion public safety network.