Federal Communications Commission member Jonathan Adelstein voiced doubts about the potential for a new national wireless broadband provider to enter the market to take on the incumbent telephone and cable broadband providers.
The Democratic commissioner said he was reluctant to structure the rules of the upcoming radio spectrum auction to encourage the entry of a new player unless there was a commitment that there would be a serious bidder at the auction.
"We don't want to set the table unless we know someone's going to come to dinner," Mr. Adelstein said.
He was speaking at a conference in Washington hosted by the Wireless Communications Association International, a lobby group for broadband service and infrastructure providers.
Speaking to reporters after his formal remarks, Mr. Adelstein said the FCC risked excluding smaller bidders from getting access to the valuable spectrum coming available for no reason if it designates a large block of it to be auctioned off but no large bidder comes forward.
A group calling itself the Coalition for 4G America has been aggressively lobbying for a 22 megahertz block of spectrum with a national license to be auctioned off. The coalition includes the likes of Google Inc., Intel Corp., EBay Inc. unit Skype Inc., and satellite television companies EchoStar Communications Corp. and DirecTV Group Inc.
It argues that such a chunk of spectrum would be necessary in order for a bidder to launch a significant challenge to the dominant cable and phone company broadband providers.
More than 95% of residential broadband access is currently accounted for by large telecommunications companies such as AT&T Inc. and Verizon Communications Inc. and the largest cable operators like Comcast Corp. and Time Warner Cable Inc.
Last week, Robert McDowell, a Republican FCC commissioner, voiced his own skepticism about the group's coalitions. Both commissioners share the concern that a bidder may not come forward leaving the large block of spectrum to be snapped up by an incumbent provider.
Verizon Wireless, a joint venture between Verizon and the U.K.'s Vodafone PLC, is also pushing for a large block of spectrum.
"You are talking about a several billion dollar commitment followed by probably between $10-$15 billion more to build the actual network — if someone was preparing that sort of business plan, you would think there'd be some sort of evidence of it," Mr. Adelstein told reporters.
The two commissioners' doubts stem from the fact that in a separate auction last year, the two satellite television companies pushed for a rule change that would facilitate a national license, but then pulled out of the subsequent auction in the early rounds when they were outbid. The satellite companies argue that they pulled out of the last auction for business reasons, and that they can't commit to this auction until they have a better idea what the rules will look like.
Some 60 megahertz of lucrative spectrum is coming available as a result of the transition by television broadcasters to a digital signal from their current analog one.
The FCC is expected to finalize its rules by mid-July at the latest, after which it will be more clear what size chunks of spectrum with what type of geographic licenses will be available.