There was little doubt the FCC would approve the auction. But the FCC had been facing pressure to rejigger the auction rules to allow participation of all types of cell phone operators, including rural operators. The rules for the auction adopted Thursday do just that, according to FCC Chairman Kevin Martin.
Added FCC Commissioner Kathleen Abernathy: "We want to make sure we have maximum flexibility and for smaller entities to come in and bid."
The commission's unanimous vote sets the stage for the largest radio-wave auction (about 90 megahertz of spectrum) for cell phone operators since 2000. Because spectrum is rarely available in such large chunks, the auction represents one of the biggest opportunities for both large and small cell phone operators to fill out coverage areas.
"The stakes are high because (of) the opportunity for national carriers to acquire blocks of spectrum covering large sections of the country," analysts from Medley Global Advisors, an advisor to financial institutions and governments, wrote in a research note.
The radio spectrum to be auctioned is able to support, and as a result could be used to deliver high-speed Internet service into rural areas and densely packed cities that still lack broadband access. Carriers that win the right to license the airwaves also will use them to augment their voice services.
The auction could fetch an estimated $15 billion. A percentage of the proceeds would be used to relocate government agencies, such as the Department of Defense, that currently use the spectrum in their daily operations, according to Media Global Advisors.