FCC sets airwaves sale rule

By Jeremy Pelofsky

WASHINGTON (Reuters) - The Federal Communications Commission voted to shake up the wireless market on Tuesday by approving rules for a big airwaves auction that would require the winner to make them accessible to any cell phone or other device.

The sale would likely begin in December or January and the government expects it to raise at least $10 billion. The airwaves are being returned by television broadcasters as they move to digital from analog signals in early 2009.

The access requirement would apply to 22 megahertz of the 62 MHz of spectrum to be sold. Two Republican FCC commissioners, who expressed reservations about the idea, stressed it would not apply to existing airwaves held by carriers like AT&T Inc. (T.N) and Verizon Wireless (VZ.N)

(VOD.L).

The agency stopped short of a broader requirement sought by potential bidder Google Inc. (GOOG.O) that would force the winner to resell access to its network on a wholesale basis.

Currently, wireless carriers restrict the models of cell phones that can be used on their networks. They also limit the software that can be downloaded onto them, such as ring tones, music or Web browser software.

Republican FCC Chairman Kevin Martin, who proposed the access concept, received support from the agency's two Democratic commissioners.

The two Republican commissioners expressed support for parts of the auction plan but one, Robert McDowell, warned the highly tailored access conditions might end up suiting no bidder, and the other, Deborah Tate, cautioned there could be safety concerns if a network operator could not control the applications being used on its airwaves.