FCC to unveil auction plan on Wednesday

By Rachelle Younglai

WASHINGTON (Reuters) - The Federal Communications Commission will take its first stab on Wednesday at defining how a 2007 auction of airwave spectrum will take place.

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

The sale is touted as the last opportunity for new players to enter the wireless market and is expected to raise billions of dollars.

But first 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 kind of services can be offered using the airwaves.

The FCC is expected to outline a tentative plan at an open meeting of its commissioners on Wednesday -- a crucial step that will help potential bidders craft their strategy.

"They will put out a tentative plan," said Paul Glenchur, an analyst with Stanford Group Company in Washington. "A few more weeks will pass, and I think they will lock it down, but I don't think they are quite there yet."

Waiting in the wings are a number of companies and groups keen to grab some of the airwaves in the 700 megahertz band. That part of the spectrum is prized because the airwaves can travel long distances and penetrate thick walls.

"The 700 Mhz is the largest block of the most desirable spectrum to be made available in this generation. The future of broadband service in this country will be determined by the outcome of this auction," said Andrew Jay Schwartzman, president of Media Access Project.