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FCC expected to OK radio auction

At Friday's meeting, commissioners are expected to approve an auction of the largest swath of radio spectrum available since 2000.

The Federal Communications Commission appears ready to formally approve an auction of a large swath of the radio spectrum crucial to cell phone and other wireless services.

As of Thursday morning, the FCC had slated a vote on the auction at its Friday meeting. Scheduling a vote is seen by commission observers as the FCC's way of tipping its hand on regulatory issues, since it is extremely rare for the commission to schedule a monthly-meeting agenda item that it hasn't approved.

If the commissioners vote to approve, it would set 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.

A source familiar with the FCC said that barring any last minute development, the FCC commissioners will formally approve the auction plans. The source requested anonymity in order to protect his relationship with the commission.

The radio spectrum that the FCC appears ready to auction is powerful enough to support advanced wireless data services, 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. It's also expected that carriers that win the right to license the airwaves will use them to augment their voice services.

The airwaves could fetch about $15 billion at auction. A percentage of the proceeds would be used to relocate government agencies, such as the Department of Defense, currently using the spectrum in their daily operations, according to Media Global Advisors.