FCC Agrees to Wireless Auction Rules

Ahead of a June 29 wireless spectrum auction, the Federal Communications Commission on Wednesday voted to allow anonymous bidding if the agency felt a certain level needed to be present. The move would be a change from past auctions, where bidder's identities and bids were revealed at the end of each round.

The FCC expects to raise some $8 to $15 billion from the auction, but the agency said it worried that some would use the openness of the process to communicate with each other. This could result in lower than market value prices, or companies intimidating others into withholding bids.

With more than 1,100 licenses up for grabs, there is a lot at stake from the government's standpoint. These licenses are valuable, and would be used to provide 3G wireless services. However, the risk of intimidation is apparently too great.

"I believe the approach we adopt today - which is based upon a proposal supported by numerous commenters in the record - strikes an appropriate balance between these competing concerns," FCC chairman Kevin Martin said in a statement.

Auctions that would follow the anonymous format would be based on the receipts of up-front payments to participate in the auctions, due June 1. Those spectrums with few bids would likely use the "blind" bidding process.

The decision is different from an initial January public notice that urged blind bidding be used for all auctions. It was opposed by the wireless industry, which said there has never been any evidence that the open process invited anticompetitive behavior.

Thus, a compromise was reached based partially on suggestions by wireless carrier T-Mobile, said the FCC.

However, while the agency's commissioners unanimously approved the proposal, some said the rule change worried them. "I continue to have lingering questions as to why we would experiment with dramatically new procedures on an auction of this size and scope," warned Commisioner Jonathan Adelstein.

Commissioner Michael Copps had additional concerns, saying the decision could lead to unintended consequences."A worst case scenario, of course, would involve fewer bidders participating in the auction and less revenue raised in the process," he said.