Writing to the FCC on Wednesday, AT&T Vice President-Federal Regulatory Joan Marsh warned that plans to implement incentive auction rules that would potentially limit bidding on 30 MHz of wireless spectrum per market would force her company to reconsider its planned participation in the incentive auction process. In anticipation of an FCC vote next month, members of FCC Chairman Tom Wheeler’s staff are reported to be circulating draft rules that would govern the auction of 600 MHz spectrum assets to be surrendered voluntarily by broadcasters in the first step of the incentive auction process. According to unnamed FCC sources, the agency is considering the adoption of a bidding threshold during the auction—based on overall bids, price per MHz, or a combination of both—at which 30 MHz of spectrum per market would be reserved for small wireless carriers and other bidders that hold less than one-third of the low-band spectrum assets in such markets. If the reserved spectrum fails to garner sufficient bids, those channels would be returned to the “unrestricted pool” for bids by any company. Voicing “significant concerns,” Marsh advised Renee Gregory, Wheeler’s legal advisor for wireless issues, that the FCC’s plan would restrict AT&T from bidding in markets that cover 70% of the U.S. population. Marsh further noted that, in all scenarios in which carriers bid on less than 70 MHz of spectrum, restricted bidders that include “specifically AT&T and Verizon . . . would be limited to bidding for only three blocks of spectrum.” Observing that “in each market where the restrictions attach to at least two carriers, at most only one restricted carrier could emerge from the auction with a 10X10 MHz allocation” required for effective deployment of fourth-generation LTE services, Marsh lamented that the agency’s proposal “makes it a virtual certainty that either AT&T or Verizon or both would be limited by the auction restrictions to a fragmented, uneconomic and inefficient 600 MHz footprint.” As such, Marsh charged that the proposed rule would put AT&T “in an untenable and unacceptable position” that would leave the company with no choice but to “consider whether its capital and resources are directed toward other spectrum opportunities that will better enable AT&T to support high quality LTE network deployment.” While stressing that “all who want to participate in the auction will be able to bid,” Wheeler acknowledged to reporters: “in order to assure coverage and competition in rural America, it may be necessary to assure no one can monopolize the bidding.”