AT&T Criticizes FCC Bid to Keep Power in Airwaves Auction

AT&T Inc.’s top Washington executive said he’s “troubled” that Federal Communications Commission Chairman Julius Genachowski wants his agency to keep its power to set terms for auctions to free airwaves for smartphones.

Genachowski’s stance, outlined in a Jan. 11 speech, may risk killing legislation to sell rights to unused television airwaves, said Jim Cicconi, AT&T’s senior executive vice president-external affairs, on a company blog today.

Congressional leaders aim to set rules this year for the TV airwaves auctions proposed by the Obama administration. The sales are supported by AT&T and its larger rival Verizon Wireless, which seek wireless spectrum to meet increased demand from smartphones and tablet computers.

“The FCC should be a neutral arbiter,” Cicconi said. “It should not be empowered by Congress to advantage some companies and disadvantage others.”

AT&T, the second-largest U.S. wireless carrier, and Verizon were the biggest winners in a 2008 auction of airwaves suitable for smartphone use, spending a combined $16 billion in an auction run by the FCC. In 2010, the companies objected after the agency restricted their ability to lease airwaves from a company that is now Philip Falcone’s proposed LightSquared wireless service.

‘Micromanage’ Auctions

Genachowski said that proposals before Congress would bar the FCC from allocating airwaves to some innovative uses, and prevent the agency from exercising its traditional prerogative to set terms for auction participation.

“It would not be wise to prejudge or micromanage FCC auction design,” Genachowski, a Democrat, said in a speech at this week’s Consumer Electronics Show in Las Vegas.

Cicconi said that AT&T welcomes FCC support for auctions.

“We are troubled, though, that the chairman and some of his staff are now saying that the FCC, and not the United States Congress, should have full power to impose conditions, and to decide which companies are allowed to participate,” Cicconi said.

Neil Grace, an FCC spokesman, didn’t immediately comment.

Representative Fred Upton, the Michigan Republican who is chairman of the Energy and Commerce Committee that oversees the FCC, said in an e-mailed statement that the agency has “the flexibility it needs” to design auction rules.

“It sounds like we have a federal agency more concerned about preserving its own power than offering serious improvements as we prepare to finalize this legislation,” Upton said.

Sprint’s Concern

Sprint Nextel Corp., the third-largest U.S. wireless carrier, said in an e-mailed statement that FCC auctions since 1994 have raised more than $60 billion and “built a solid foundation for wireless competition.”

“Tampering with the FCC’s auction authority risks significant damage to the wireless industry -- a key driver of America’s innovation economy,” Larry Krevor, Sprint’s vice president of government affairs, said in the statement.

Steven Berry, president of the Washington-based Rural Cellular Association that represents smaller wireless carriers, said in an e-mailed statement that AT&T was seeking “to ensure that only the largest carriers will be able to successfully participate on spectrum, to the detriment of competitors and taxpayers.”

To contact the reporter on this story: Todd Shields in Washington at tshields3@bloomberg.net.

To contact the editor responsible for this story: Michael Shepard at mshepard7@bloomberg.net

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