The limits on bidding in the auction "needlessly jeopardizes its success," Pai said. "We need to persuade bidders to bring billions of dollars to the table, and we can't afford to engage in ideologically motivated experiments."
The rule creates a "corporate welfare" for competitors to Verizon and AT&T, after those competitors made past business decisions to avoid low-band spectrum, O'Rielly said. While not mentioning Sprint and T-Mobile USA by name, O'Rielly noted that some competitors chose to sit out the 2008 700MHz auction.
The spectrum plan unfairly penalizes customers of AT&T and Verizon by limiting the spectrum those two companies can add to their networks, he added.
The plan approved Thursday would trigger an FCC review on mobile carrier sales of spectrum below 1GHz when a mobile carrier holds one-third or more of spectrum in any market.
In a related vote, the commission approved the rules for the 600MHz auction.
Pai criticized the rules as overly complicated. A long set of rules is necessary in the complicated two-sided auction, in which TV stations sell spectrum and mobile carriers buy it, because such a spectrum auction has never been previously attempted, Wheeler said.
"Nobody has ever asked that this kind of a Rubik's Cube be put together, let alone tried," he said."You can't go on the Internet and find a quick solution on how you do the [spectrum] Rubik's Cube."
While AT&T has criticized Wheeler's proposal to limit its purchase of spectrum in the auction — at one point suggesting it might boycott the auction — the company Thursday said the approved rules put the "auction on the path toward success."
"While we have long opposed auction restrictions and set asides, the compromise framework will give AT&T a fair shot to participate at auction for a meaningful 600MHz footprint," Jim Cicconi, AT&T's senior executive vice president of external and legislative affairs, wrote in a blog post.
The rules approved by the FCC "will give AT&T a fair opportunity to expand its LTE footprint to benefit consumers in all markets, and AT&T remains committed to auction success and anticipates that it will participate broadly," he added.
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