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A US$1.3 billion reserve price for a piece of wireless spectrum to be auctioned by the U.S. Federal Communications Commission in January is too high, according to one company interested in the spectrum.

The FCC has proposed the reserve, or minimum price, of about $1.3 billion for a 10MHz portion of spectrum to be paired with 12MHz set aside for emergency response communications. With that 22MHz of spectrum, the winning bidder will be required to build a wireless network to be used by public safety provider and for commercial wireless communications.

But Frontline Wireless LLC, the startup that pushed the public safety plan, said Tuesday the FCC's reserve price for the so-called D Block of spectrum is "unprecedentedly and irrationally high." The winning bidder will be required to build out a national network costing billions of dollars, Frontline argued in a brief it filed Friday.

Many bidders "will hold back bids in the initial action to prevent the reserve from being met," Frontline said. "They will withhold higher bids until the re-auction when there will be weaker service rules ... and fewer competing bidders."

Frontline was one of 13 groups that filed comments by Friday's deadline on the FCC's auction plan, released earlier in August. The FCC is schedule to auction 62MHz of spectrum in the 700MHz band beginning Jan. 16. The FCC set a reserve price of $10 billion for the entire 62MHz, but many observers believe the auctions will raise much more than that.

The spectrum is currently controlled by U.S. television stations using channels 52 to 69. The U.S. Congress in late 2005 passed legislation that requires the stations to move to digital broadcasts and abandon spectrum in the 700MHz band by February 2009.

Among other comments filed were ones from the Coalition for 4G in America, whose members including Google Inc. and Intel Corp. The coalition called on the FCC to create definitive rules for extending an auction that would allow high bidders to meet the reserve price set for the auction.

In a section of spectrum called the C Block, the FCC has set rules that would require that the winner of the 22MHz of spectrum allow any wireless devices to connect to the network, meaning wireless telephone customers could bring their handset devices from other carriers. The FCC, in so-called open-access rules, also prohibited the winning bidder on the 22MHz block of spectrum from blocking or slowing wireless and Web content from competitors.

But if the reserve price isn't met, the FCC would re-auction the spectrum, presumably with the open-access rules removed. "If the 700MHz auction were cancelled for failing to reach the reserve price, it would not result in a re-auction, but effectively in a different auction altogether," the coalition said.

Frontline, in its Friday brief, also called on the FCC to limit the amount of commercial mobile spectrum in each market to 70MHz. If the winning bidder has more than 70MHz, it should be disqualified from bidding on more spectrum, Frontline said. "Significant additional accumulation of spectrum by the largest wireless carriers in this auction, coupled with current market concentration, could cripple the ability of competitors to develop new services and cause serious competitive harm in the wireless market," Frontline said.

Representatives of Verizon Wireless LLC and AT&T Inc. didn't immediately respond to a request for comments on Frontline's filing.