Federal regulators on Thursday set the date and final rules for a unique, complex effort to buy some broadcast airwaves and auction them to wireless companies to provide more mobile services.
The so-called broadcast incentive auction will begin March 29, a little more than four years after Congress authorized the innovative approach in hopes of making more spectrum available for wireless Internet and generating billions of dollars in revenue for the government.
The premise is simple: lure some broadcasters to give up their valuable spectrum by offering to share some of the money the government will receive by auctioning the rights to use the airwaves to wireless providers.
"This is now going to start things rolling," said Federal Communications Commission Chairman Tom Wheeler.
Broadcasters and wireless companies will be able to start submitting applications this fall to participate in the auction, he said.
But the auction is highly complicated and some of the specific procedures are controversial, with implications for the amount of airwaves available to the largest wireless companies and potential interference problems for over-the-air signals of broadcasters and the ability to download data on smartphones.
Reflecting that, the rules were approved on a partisan 3-2 vote by the Democratic-controlled agency.
"The complexities of reclaiming old airwaves and repurposing them for new wireless use are big — and the small details matter," said Jessica Rosenworcel, one of the three Democratic commissioners who approved the rules. "We cannot forget we are making history."
A key provision in the final rules will limit the ability of the dominant wireless providers — AT&T Inc. and Verizon Communications Inc. — to purchase the rights to use the new airwaves in some markets, in order to promote competition.
But the FCC voted 5-0 to reject a push from T-Mobile to set aside even more airwaves for competitors to the two dominant wireless providers, which could reduce auction revenues.
The FCC's Republicans, Ajit Pai and Michael O'Rielly, voted against the other auction rules Thursday. They said that the rules would limit the revenues raised and that their attempts to improve the auction procedures were rejected by Wheeler and the Democrats.
"It's unfair to the American people," O'Rielly said. "This is their resource we're auctioning off and we're not getting full value."
Verizon said T-Mobile and Sprint have the money to compete in the auction without extra assistance from beneficial rules.
"We did not believe they needed set-asides from the FCC at the expense of American taxpayers in the first place, and they certainly didn't need any additional help on top of that," Verizon spokesman Ed McFadden said.
T-Mobile Chief Executive John Legere said the company still was "committed to showing up, playing hard and being successful at the auction."
As part of the final auction rules, the FCC also opened the door to moving TV stations in Los Angeles and some other markets into portions of the airwaves reserved for wireless microphones and mobile downloads.
The decision was made because the FCC wants to leave some broadcast airwaves open for Wi-Fi and other unlicensed uses.
The National Assn. of Broadcasters called the decision "a major setback for … a successful incentive auction."
The group said the rules would result in lower payments to broadcasters for their airwaves and "decades of interference disputes" among other problems.
"With the auction only months away, NAB remains committed to doing what we can to correct this misguided plan and help craft a successful auction that is fair to all stakeholders," said Dennis Wharton, the group's executive vice president.