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WASHINGTON (Reuters) - The top U.S. telecommunications regulator on Wednesday said he was unconvinced by AT&T Inc's threat to sit out next year's major auction of wireless spectrum over proposed restrictions on its participation.
AT&T, the second biggest U.S. wireless carrier, last week said it may choose to skip the so-called incentive auction of valuable airwaves scheduled for next year if the Federal Communications Commission adopts rules that reserve some of the spectrum for smaller nationwide carriers.
"I find it hard to believe that somebody who has advocated so forcefully about why is it absolutely essential that they have spectrum like this would pass on the opportunity," FCC Chairman Tom Wheeler told reporters on Wednesday.
"I have a hard time envisioning this once-in-a-lifetime opportunity for this kind of beachfront spectrum being something that people throw up their hands and walk away from."
Wheeler's plan, which the FCC is expected to vote on at a May 15 meeting, would reserve up to 30 megahertz of spectrum in each market for bidding only by carriers that control less than one-third of low-frequency airwaves there.
That would benefit the No. 3 and No. 4 carriers, Sprint Corp and T-Mobile USA, as it would largely limit the two biggest carriers, Verizon Communications Inc and AT&T.
The airwaves that will be sold are particularly valued for their reach and strength.
Lack of AT&T's participation could put a squeeze on how much cash the FCC raises in the sale of airwaves. The FCC faces a congressional mandate to raise enough money to fund a new $7 billion public safety network and pay back TV stations for giving up the airwaves that will be sold in the auction.
However, asked what FCC may do to compel AT&T to participate, Wheeler said:
"Nobody is compelling anybody to participate in the spectrum auction. Whether the broadcasters sell or the wireless carriers buy is entirely a function of their own free will and a marketplace that we create."
Reporting by Alina Selyukh; Editing by Jonathan Oatis