FCC chairman Tom Wheeler circulated a report Thursday outlining the framework of the auction. The report detailed how TV stations that relinquish their spectrum will be reorganized and assigned to a different channel.
"Getting the incentive auction right will revolutionize how spectrum is allocated," Wheeler wrote in a blog post. "By marrying the economics of demand (think wireless providers) with the economics of current spectrum holders (think television broadcasters), the incentive auction will allow market forces to determine the highest and best use of spectrum."
One of the FCC's proposed rules is already garnering criticism from companies with deep pockets. The rule suggests that all companies will be allowed to bid on the spectrum licenses, but if bidding passes a certain threshold, up to 30 megahertz of the airwaves will be set aside for smaller carriers.
AT&T has been the first to object to restrictions being placed on its buying power and has threatened to boycott the auction.
"If the restrictions as proposed are adopted, AT&T will need to seriously consider whether its capital and resources are directed toward other spectrum opportunities that will better enable AT&T to continue to support high quality LTE network deployments to serve its customers," wrote AT&T's regulatory vice president Joan Marsh.
Another proposed, and controversial, rule involves setting aside a significant amount of spectrum for use by unlicensed devices, and could be anywhere between 12Hz to 20 Hz. This spectrum will be interlaced between the TV channels to prevent interference, but this fracturing of spectrum will make it harder to use for unlicensed purposes, such as Wi-Fi-like services.
The tech industry has asked that four TV channels worth of spectrum be set aside for use by unlicensed devices. But that seems unlikely, as the FCC is under pressure from Congress to maximize the profits from the auction by selling off as many TV airwaves as possible.
Most airwaves are used by federal agencies or companies that have licenses. Wi-Fi is an example of unlicensed use, and involves the use of airwaves that are open to anybody.
The FCC is scheduled to vote on the rules in May.
[FCC Blog Post]