Mobile devices using a new U.S. radio band with free wireless service would not cause significant interference with cell phones using a nearby band, the Federal Communications Commission has concluded from tests conducted last month.

The FCC is considering auctioning off frequencies in a band between 2155 and 2175 MHz to operators that would be required to offer free wireless data services in that band. The agency tested use of this proposed AWS-3 (Advanced Wireless Services 3) band because holders of nearby AWS-1 spectrum argued that it would interfere with their customers' devices.

In a report released Friday, the agency concluded, "the analysis shows that an AWS-1 and AWS-3 device operating in close proximity does not necessarily result in interference."

In addition, the FCC said its analysis was based on very bad conditions, so in more likely situations, the potential for interference would be less. For example, the analysis assumed an AWS-3 handset would always transmit at its maximum power, and that it would be operating close by to an AWS-1 handset and on a directly adjacent channel.

The 2155-2175 MHz band was once used for microwave links between carrier facilities but was set aside for AWS in 2000. In 2006, citing the lack of any FCC plan at the time for assigning the spectrum, M2Z Networks proposed using it for a combination of free and paid wireless services that would reach 95 percent of U.S. residents. The startup proposed paying the government 5 percent of its gross revenue rather than going through a traditional license auction.

Last year, the government rejected M2Z's plan, but FCC Chairman Kevin Martin is now circulating a proposal among the commissioners that would set rules for an auction of the spectrum. The agency had hoped to vote on the plan June 12 but delayed the vote due to objections from wireless operators. T-Mobile, for one, had said its own tests showed mobile use of the band would degrade its customers' experience.

The tests cited by the FCC's report were conducted Sept. 3-5 in Seattle in the presence of engineers from T-Mobile, M2Z, AT&T, Nokia and other entities. The results will be used as one part of the public record on the proposal, FCC spokesman Robert Kenny said in an e-mail interview.

If the commissioners support an auction, they will then have to set rules, possibly allowing additional time for public comment, Kenny said. An auction could take place in June or July of 2009 at the earliest, he said.

However, the September tests do not appear to have resolved the dispute.

T-Mobile took issue with Friday's FCC report, saying the agency based its conclusions on new assumptions that weren't used when the tests took place. The carrier wants to give comments before a formal auction plan goes before the commissioners.

"We don't think it's unreasonable, given that they took five weeks to make their conclusions public, to ask for 30 days to respond to those conclusions," said Kathleen Ham, T-Mobile USA's vice president of federal regulatory affairs.

M2Z, not surprisingly, praised the report and called for quick action to make the band available.

"There is no longer any need for American consumers, the public interest and the FCC's regulatory process to be held hostage as it has been for the last five months by incumbent carriers ... who have used unfounded claims of interference to disguise their intent to prevent the introduction of new broadband competition in the AWS-3 band," M2Z said in a statement.