U.S. regulator reasserts goal to restrict AT&T, Verizon in auction

WASHINGTON, April 17 Thu Apr 17, 2014 1:49pm EDT

WASHINGTON, April 17 (Reuters) - The top U.S. telecommunications regulator in a letter to a lawmaker on Thursday reasserted his commitment to help smaller national wireless carriers get access to valuable lower-frequency airwaves in the upcoming spectrum auction.

Federal Communications Commission Chairman Tom Wheeler reaffirmed his plans to restrict how much spectrum the biggest U.S. carriers, Verizon Communications Inc and AT&T Inc , could buy in the auction scheduled for mid-2015.

"The Incentive Auction offers the opportunity, possibly the last for years to come, to make low-band spectrum available to any mobile wireless provider, in any market, that is willing and able to compete at auction," Wheeler wrote to Representative John Barrow in a letter reviewed by Reuters.

"At the same time, a priority of the auction should be to assure that companies that already possess low-band spectrum do not exploit the auction to keep competitors from accessing the spectrum necessary to provide competition," he also said.

The FCC in May will vote on Wheeler's proposed auction rules that would reserve part of the spectrum in each market for bidding by wireless carriers that have less than one-third of the low-frequency airwaves, valued for their reach and strength.

The rules would benefit the No. 3 and No. 4 nation-wide carriers Sprint Corp and T-Mobile USA as they would largely restrict Verizon and AT&T, which Wheeler said control two-thirds of those frequencies across the country.

AT&T, the No. 2 carrier, fired the first shot against the proposed restrictions this week, threatening to boycott the auction. Though some saw the move as bluffing, lack of AT&T's participation could undermine the FCC's mandate to raise enough money to pay back broadcasters who give up the airwaves that will be sold in the auction as well as pay for a new $7 billion public safety network.

"Companies are free to advocate the views that are in their best interest, but the public interest is not measured against the business model of one or two companies; it is measured against the ability of the market to deliver the benefits of competition to Americans in urban, suburban and rural America alike," an FCC official said on Thursday.

Wheeler's letter was in response to one on Monday from Barrow, a Democrat from Georgia, and 77 other lawmakers in the House that encouraged the FCC as it prepares for the auction.

(Reporting by Alina Selyukh; Editing by Marguerita Choy)

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