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Mobile broadband's latest bidding war

President Barack Obama announces the nominator of Tom Wheeler to be chairman of the FCC at the White House on May 1, 2013 in Washington, DC.

As Americans buy more mobile devices, the airwaves become even more crowded with signals trying to reach their destination as fast as possible. Those airwaves carrying transmissions back and forth are referred to as "spectrum," and mobile providers like AT&T and Verizon can't get enough of them.

That's why the FCC is planning on purchasing spectrum from TV broadcasters and selling it to mobile broadband providers. It sounds like an easy solution to a big problem.

As chairman of the Federal Communications Commission Tom Wheeler said when he appeared on Marketplace Tech back in November:

"That, hopefully, will be a marketplace means of determining what the highest and best use of the spectrum is, and then we will take that spectrum -- which we have bought back -- and resell it to the wireless carriers to be able to meet the climbing demand for wireless services."

However, Brian Fung, a technology reporter for the Washington Post, says it's not that simple. According to Fung:

"There are two big wireless companies: Verizon and AT&T, and they want to buy up as much spectrum as they can get. On the other side you have smaller companies like Sprint and T-Mobile who say that they’re going to be shut out of the bidding opportunities if AT&T and Verizon are allowed to buy up as much as they want."

 Even more troubling is the possibility that companies like AT&T and Verizon could buy up a bunch of spectrum, and then simply not use it -- instead opting to hold onto it so that other companies don't have access to more spectrum.

Still, that won't stop the larger companies from participating. AT&T has threatened to pull out of the auction if it doesn't get its way, and that would be bad news for the Government. The FCC needs larger companies to participate in order to make the auction profitable.

About the author

Ben Johnson is the host of Marketplace Tech.

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