Consumer groups suggest rules for US wireless sale

WASHINGTON, April 5 (Reuters) - Consumer groups on Thursday came out with a last minute set of proposals aimed at ensuring that an upcoming sale of U.S. wireless airwaves will create more competition in the communications industry.

The Federal Communications Commission is expected to let bidders know sometime in April exactly what kind of services can be offered using the airwaves as well as how the auction will work and provide a set of rules on how the spectrum will be divided up.

"We are asking them to set auction rules so it is not just the incumbents that win," said Art Brodsky, spokesman with Public Knowledge, a group that advocates for consumers on telecommunications issues.

Up for grabs is a chunk of spectrum that is so valuable that it is being touted as the last opportunity for a new player to come into the wireless market.

The airwaves are being returned by television broadcasters as they move to digital signals and the sale is expected to raise billions of dollars.

The coalition of consumer groups, which include heavyweights such as Consumers Union, New America Foundation and Media Access Project, are asking for three main rules.

They want one that will ensure that broadband providers treat all Internet content in the same way -- a concept also referred to as "net neutrality".

Half of the 60 megahertz of airwaves to be auctioned should be designated as "open access" spectrum. That would allow other companies to buy access on established wireless networks so they can offer their own wireless services, the groups say.

They also asked for auction rules that would allow more competitors to bid and not just the major incumbents such as Verizon Communications (VZ.N) and AT&T Inc. (T.N)

Jeannine Kenney, senior policy analyst with Consumers Union, said the service rules determine who will win and lose the auction and will also determine whether the public benefits.

Members of the coalition admitted that it was a little late in the process to be submitting suggestions, but said it was better late than never.

"If it is in the record, it will allow the commission to stop and think of things they haven't thought of before," said Gigi Sohn, president of Public Knowledge.

Calls to the FCC for comment were not immediately returned.