F.C.C. Considers New Spectrum Rules for Wireless Companies

Not so in the air across the continent, where the Federal Communications Commission has long set limits on how much of the airwaves one company can control.

Now, pushed by small and medium-size telecommunications companies, the government plans to begin setting new rules to govern how much of the airwaves, or spectrum, a single carrier can hold. A big goal for those small companies, which compete with the behemoths Verizon and AT&T, is a measure that would give greater importance to so-called beachfront spectrum.

Those are the highly sought-after airwaves that travel farther between antennas and pass more easily through buildings, making them especially attractive in urban areas where the largest, most profitable clusters of mobile device users congregate.

It may sound esoteric, but the issue is known to every cellphone user who has experienced a dropped call or a smartphone browser stuck endlessly loading a Web page. After years of limiting companies to no more than one-third of the available airwaves in a given territory, the F.C.C. on Friday will begin the rule-making process on whether new technologies require limits to be redrawn, recalibrated or perhaps removed.

The F.C.C.’s decision, which probably will not be final for about a year, will have broad effects on consumers and companies. It plays a part in another matter the agency is expected to consider on Friday: rules for auctioning off newly reclaimed airwaves.

In that effort, the commission is aiming to take back portions of the airwaves used by the military or by television broadcasters, offering cash incentives for companies or other groups to give up their spectrum. Those airwaves would be auctioned, with a portion of the proceeds going back to the original license holder.

By giving more weight to the best-performing spectrum, the F.C.C.’s overall limits could increase competition by restricting the big companies from buying too much of the airwaves, said Matt Wood, policy director for Free Press, a consumer advocacy group. “It is not the sheer amounts that matter,” he said. “It is where it is located on the radio dial that makes certain spectrum more valuable to a wireless company’s business.”

Some wireless company executives disagree, saying that the fact that some airwaves can travel farther than others is meaningless in a large city like New York, where so many users are congregated that a company already has to put in extra towers to keep airwaves from being overloaded. Overloading, of course, results in dropped calls.

Nevertheless, the quest for new rules is being welcomed by large and small mobile phone companies alike, each looking for a competitive advantage. Public interest groups that often oppose the companies’ efforts to trade spectrum also favor changes.

“There are a lot of competing interests here,” said Walter G. D. Reed, a partner at Edwards Wildman Palmer in Providence, R.I., who has worked on telecommunications issues. And the F.C.C.’s challenge is how to allow companies like AT&T and Verizon expand their businesses while ensuring that smaller carriers do not get shut out.

Wireless industry executives say that they would welcome almost any new standards because that would remove the uncertainty cast by the agency’s past practice of weighing potential spectrum deals case by case.

“Spectrum policy in this country needs to be built on a full factual record and rational economic policy,” Joan Marsh, vice president for federal regulatory issues at AT&T, said in an interview. “Carriers need a clear and reliable understanding of when and under what circumstances spectrum acquisitions will be permitted, something we do not have today. This proceeding will provide the vehicle to meet both goals, and take spectrum policy out of merger-specific proceedings and place it in an industrywide rule-making, subject to judicial review.”

The F.C.C. staff has circulated its proposals to the five-member commission, but the agency would not discuss the possible outcomes before the Friday meeting.