The ability to use new slices of the airwaves is eagerly being sought by wireless carriers that want to offer more Internet-related services. Many of these wireless companies already are running into capacity problems with the spectrum they use for voice services.
The Federal Communications Commission said today that it would impose a "short delay" on auctions originally scheduled for Nov. 6 to change the rules governing the bidding process.
In response to comments from industry figures, regulators agreed to open some of the bidding to large companies such as Sprint PCS, AT&T Wireless and Verizon Wireless. Previously, much of the spectrum for auction in the upcoming round was restricted to "entrepreneur" companies with revenues below $125 million.
Regulators also agreed to split the pieces being auctioned, allowing the large companies to bid on smaller segments without threatening to exceed federally mandated caps on the amount of spectrum any one company can own.
The FCC placed the "entrepreneur" restrictions on some airwave auctions several years ago as a way to expand the wireless market. However, many of the small companies that bid, such as NextWave Telecom, were unable to make payment on the spectrum, leading to several bankruptcies and forfeitures. It is that previously auctioned spectrum the FCC is selling now.
Many companies argued in comments to the FCC that the wireless industry has more significant competitors than it did several years ago, and so the restrictions are no longer necessary.
Still, the commission did keep the small-company restrictions for much of the spectrum that will be put on the auction block.
The new rules "carefully balance the needs of both small and larger entrepreneurs to acquire spectrum at a time when the Internet is moving to portable wireless devices," FCC Chairman William Kennard said in a statement.
The order also lifts the cap on how much one bidder can win at auction. By keeping the total spectrum ownership cap and the entrepreneur requirements on some spectrum, however, it effectively prevents the big carriers from dominating the auction.
Regulators said they would announce a new date for the auction soon, probably within the next few days.
Early this month, the commission delayed another auction, this time of the slice of airwaves that provides transmission for TV channels 60 through 69. Big companies like Verizon and others, which want to use this spectrum for data services, had asked the commission to put off the bids because of concerns about TV stations that still operate.
That issue has raised warning flags in Congress, which has forecast billions in revenue from the proposed auction in its budget calculations. That auction has been put off until March 6, 2001.