AT&T evaluates options in wireless auction

NEW YORK (Reuters) - AT&T Inc. (T.N) said on Tuesday it was not in favor of a proposal that would require the winner of a coming sale of wireless airwaves to offer "open access" to rivals.

John Stankey, AT&T's group president of operations support, also told the Reuters Global Technology, Media and Telecoms Summit in New York that it would be bad public policy to preclude certain parties from participating in the auction.

The Federal Communications Commission, which is expected to start auctioning off a swath of wireless airwaves later this year, has asked the public for comment on a number of proposals that could shape the bidding process.

A number of proposals are on the table -- some favor wireless incumbents like AT&T and Verizon Communications Inc. (VZ.N), while others favor the smaller players and content providers.

"There is some debate whether there should be some parties precluded from participating in that auction, which we think would be a really, really poor public policy decision to try and pick winners and losers who could come in and participate," Stankey said.

"Notwithstanding all those caveats, we are evaluating what we think all our needs are there and how we might participate and what the businesses are and the customers applications we need to support."

The FCC will auction spectrum in the 700 megahertz band that are being returned by broadcasters as they move from analog to digital signals.

But before the auction can start, the FCC must provide a set of rules on how the spectrum will be divided and say what services can be offered on the airwaves.

One proposal from a coalition of consumer groups has asked the FCC to ensure that broadband providers treat all Internet content in the same way.

That coalition has also asked the agency to designate half of the available spectrum as "open access." That means any company with a device or phone could pay to use or lease the winning bidder's network.

"That's something we would not be in favor of," said Stankey. His comments come about a week after Verizon, the country's second biggest telecommunications company, also came out against the proposal saying it would devalue the spectrum.

The FCC will decide how winning companies should build out their infrastructure and what devices could be used on the networks.

Two potential networks are at stake in this auction of spectrum.

One is a public safety network that would better allow emergency workers to communicate, a significant problem during Hurricane Katrina and 9/11. The other is a network that could potentially be the last opportunity for a new player to enter the billion dollar wireless space.

(For more on the Reuters Global Technology, Media and Telecoms Summit, see ID:nSP21633. For summit blog: summitnotebook.reuters.com/)