White House pushing ahead with airwaves auction plan

The Obama Administration will make an economic case on April 6 for moving ahead with a controversial auction of broadcast airwaves, even as some analysts argue that AT&T’s proposed merger with T-Mobile throws a wrench into the plan.

The Administration’s goal to blanket the country with wireless high-speed Internet connections has been pitched as an economic opportunity to create high-tech jobs that also help the U.S. compete globally. To carry out that goal, President Barack Obama said he hopes to raise $27.8 billion over the next decade from auctions of broadcast channels that would be converted into wireless networks to connect smart phones and tablets to the Internet. At a White House meeting on the plan , the Administration will present a letter of support signed by more than 100 economists who say the auctions are the best way to create new mobile phone networks and would “increase social welfare.”

But the plan appears to face new challenges because of AT&T’s recent proposal to take over T-Mobile for $39 billion, experts say. The merger could slow progress toward the administration’s goals and could “alter the current spectrum debate in Washington,” Rebecca Arbogast, an analyst at Stifel Nicolaus, said in a recent note. “If these two companies can satisfy much of their spectrum needs by joining forces, it would reduce some of the demand for new spectrum and possibly lower auction revenue estimates.” The merger would reduce the number of major national carriers from four to three. The money from the auction is to be used to pay back the broadcasters who give up spectrum, to expand wireless connections to rural areas and to pay for an emergency public safety network.