FCC Chair open to expanded airwave auction plan

MOUNTAIN VIEW, California (Reuters) - U.S. Federal Communications Commission Chairman Kevin Martin said on Thursday he is open to public-private partnerships to help build out a new wireless network.

The communications regulator plans to auction off wireless airwaves later this year that are being returned by television broadcasters as they move to digital signals early in 2009.

The FCC is seeking to boost U.S. broadband market competition beyond existing telephone and cable TV networks.

Speaking to a civic group at Microsoft Corp.'s (MSFT.O) Silicon Valley campus, Martin backed arguments that advances in technology could allow emergency workers to take advantage of commercial network equipment and capacity.

In exchange, emergency workers could allow commercial phone carriers to use part of the airwaves reserved for public safety workers at noncritical times.

"One of the things that I think we need to do is (to consider) the potential to have some synergies between the two, some public-private partnerships that would allow for cross-utilization of the spectrum," Martin said.

In coming months, the FCC has to define how the auction will work, provide a set of rules on how the spectrum will be divided and say what services can be offered on the airwaves. Bidding could bring billions of dollars into U.S. coffers.

A number of proposals are on the table and include one from a coalition of consumer groups that want half the airwaves up for auction to be designated as "open access" spectrum.

Such as designation would allow other companies to buy access on established wireless networks so they can offer their own wireless services.

Another proposal from start-up firm Frontline Wireless of Greensboro, North Carolina, wants the block of spectrum that is next to a block set aside for emergency workers to be designated for both public safety and commercial use.

That plan is backed by some of Silicon Valley's most powerful venture capitalists.

VARIED BIDDERS SEEN

A variety of established communications carriers, technology start-ups and local and regional bidders are expected to take part in the auction.

At stake is access to airwaves in the 700 megahertz band, which is considered valuable because the airwaves can travel long distances and penetrate thick walls. It is seen as the last opportunity for a new player to enter the wireless space.

Of the swath of airwaves being freed up by the broadcasters, 60 Mhz will be auctioned off and 24 Mhz has been set aside solely for public safety communications.

"Public safety (agencies are) coming to us to say they don't have the resources to build out a next-generation (wireless) network," Martin said. "The question is one of how to work with private sector," he told 100 high-tech business leaders.

Two-thirds of the spectrum, or 40 Mhz, would be reserved for smaller local players to bid on, potentially to build independent businesses or to resell for use by bigger players, Martin said.

The remaining one-third, or 20 Mhz, should be offered to bigger communications players with an eye toward ensuring that major regional or even a single national player emerges that can compete effectively with established phone and cable carriers, he said.

"I think it is important to use the upcoming auction to make sure there is more than just two competitors," Martin said of the emergence of a third broadband alternative for U.S. consumers, using the freed-up wireless airwaves.

"It is important that we auction that off so someone with critical mass evolves," he said.

Martin was appointed to the FCC as a commissioner in 2001 by President George W. Bush. He was named chairman in 2005.