UPDATE 1-US FCC sets Jan 16 for big wireless auction

(adds details, background)

WASHINGTON, Aug 17 (Reuters) - The U.S. Federal Communications Commission will hold a major auction of airwaves in the 700 megahertz band beginning on Jan. 16, 2008, the agency announced on Friday.

The auction is expected to raise at least $10 billion for airwaves being returned by television broadcasters as they move to digital from analog signals in early 2009.

The FCC issued a public notice late Friday, asking for public comment on its proposed auction procedures for anonymous bidding, block-specific aggregate reserve prices, and allow package bidding for certain licenses in the auction.

The deadline for the first round of comments on the FCC's plan is August 31, with a final round of reply comments due Sept. 7, the agency said.

Auction preparations by the agency have been closely monitored by Verizon Wireless (VZ.N), AT&T Inc (T.N) and other telecommunications companies. The airwaves to be sold can travel long distances and penetrate thick walls, and the auction is seen as a last opportunity for a new player to enter the U.S. wireless market.

The FCC said it plans to withhold until after the close of bidding the public release of the bidders' license selections, upfront payments, and any information that might reveal the identities of other bidders.

"For example, we propose to withhold the identities of bidders placing specific bids or withdrawals and the net bid amounts, although we will disclose after the close of each round the amount of every bid placed and whether a bid amount was withdrawn," the agency said.

The FCC also said it planned to set block-specific aggregate reserve prices for the auction to ensure the U.S. government is paid a fair price for the bandwidth and receives at least $10 billion for all the airwaves available.

"We propose that if the sum of the provisionally winning gross bids for the licenses in a block does not satisfy the relevant aggregate reserve price, none of the relevant licenses for the particular block will be assigned based on the auction results," the notice said.

The auction will offer a total of 1,099 licenses. That includes 176 in the A Block, 734 in the B Block, 12 in the C Block, 1 in the D Block, and 176 in the E Block, the agency said.

Last month, FCC commissioners voted to shake up the wireless market by requiring the winner of some of the spectrum to make the airwaves accessible to any cellular telephone or similar device. The access requirement would apply to 22 megahertz of the spectrum to be sold.

The agency action stopped short of a broader requirement sought by potential bidder Google Inc (GOOG.O) that would force the winner to resell access to its network on a wholesale basis.

The FCC's auction plan was posted on the Internet at www.fcc.gov .