Consumers have a lot at stake in a debate now heating up in Washington over exactly how the government should sell off the rights to use some of the country's most versatile and valuable airwaves.

At issue is the so-called "700 MgHZ Auction," the rules of which are now being hammered out by the Federal Communications Commission.

We went deep into the details of all this in a Now Hear posting a few weeks ago, but here's a quick review:

The government has ordered television broadcasters to return a large chunk of the free airwaves they have used for decades when they switch over to digital broadcasting in February 2009. Those returned airwaves -- which are located along the 700 Megahertz portion of the broadcast spectrum -- are highly prized because they are able to travel fairly long distances and penetrate structures.

The FCC plans to auction exclusive licenses to this coveted portion of the spectrum and is in the final stages of writing the bidding rules. And those bidding rules are what the current hubbub in Washington is all about.

Existing wireless heavyweights such as Verizon and AT&T want the FCC to conduct this auction with the same process it has used in past airwave sales, with virtually no rules or restrictions on how winning bidders can use the spectrum they buy.

On the other side is a broad coalition of technology companies (including Google), public interest groups and consumer organizations, including Consumers Union, which sponsors www.hearusnow.org and this blog. There are some differences within this coalition, but one overriding goal is to fashion bidding rules that would allow for the creation of a nationwide wireless broadband system to compete with the phone and cable companies.

As it stands now, big wireless carriers such as Verizon and AT&T have a virtual hammerlock on the services and devices available to American consumers. That is in sharp contrast to much of Europe and Asia, where consumers can use their wireless devices on any wireless provider network they choose.

In some potentially good news for consumers, FCC Chairman Kevin Martin said earlier this week he wants the rules to allow more consumer choices.

"Whoever wins this spectrum has to provide … truly open broadband network — one that will open the door to a lot of innovative services for consumers," Martin said in an interview with USAToday. "You can use any wireless device and download any mobile broadband application, with no restrictions. The only exceptions would be software that is illegal or could harm a network."

Martin's proposal would be limited to only about a third of the 700 MgHZ airwaves to be auctioned. -- literally a drop in the bucket compared to the vast swaths of broadcast spectrum already controlled by the big wireless companies. But it would at least be a small step in the right direction.

Consumers Union and other public interest groups believe the FCC needs to go much further in encouraging a truly competitive wireless market for consumers, however.

In comments filed recently with the FCC, CU and others groups called for the agency to implement an “open access” model that includes Net Neutrality conditions for content and applications and permits third parties to access the network as wholesalers and provide a wide variety of wireless broadband services and access alternatives.

It's ridiculous that American consumers are unable to enjoy the same rich choices in wireless devices and services as their counterparts in so many other parts of the world.
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A Great New Approach on Early Termination Penalties

A New York consumer protection official has come up with a marvelous response to Sprint's recent decision to unplug more than 1,000 subscribers it says were calling it customer service center too much.

New York Consumer Protection Board Chairwoman Mindy Bockstein says Sprint should have to pay each of the cancelled subscribers a $200 early termination penalty.

"If someone adheres to a contract and pays for service that carries a termination fee for quitting, it should be a two-way street," she told the Los Angeles Times.

Alas, Bockstein's board does not have any regulatory authority over Sprint.
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