US antitrust officials today urged the Federal Communications Commission to limit the amount of wireless spectrum Verizon Wireless and AT&T can buy during future auctions.

The Department of Justice's Antitrust Division, in a letter sent to the FCC yesterday and made public today, said Verizon and AT&T have more than their share of prime spectrum compared to T-Mobile and Sprint.

"[T]he Commission must ensure that the allocation of spectrum at auction does not enable carriers with high market shares to foreclose smaller carriers from improving their customers' coverage," DOJ officials wrote. "Today, the two leading carriers have the vast majority of low-frequency spectrum, whereas the two other nationwide carriers have virtually none. This results in the two smaller nationwide carriers having a somewhat diminished ability to compete, particularly in rural areas where the cost to build out coverage is higher with high-frequency spectrum."

The DOJ filing came in response to a notice of proposed rulemaking the FCC issued last September in order to review "policies governing mobile spectrum holdings in order to ensure that they fulfill our statutory objectives given changes in technology, spectrum availability, and the marketplace since the Commission’s last comprehensive review more than a decade ago."

With FCC Chairman Julius Genachowski stepping down, the new yet-to-be-named chairperson will likely preside over an auction of spectrum controlled by TV broadcasters. That's low-frequency spectrum in the 600MHz band, attractive because its signals propagate farther than those going over higher-frequency airwaves.

In addition to licensing spectrum to cellular providers, the auction could either increase or decrease the amount of unlicensed spectrum available to White Spaces networks. The auction is still in the early planning stages, with no date set.

Consumer advocacy groups applauded the DOJ's stance. Public Knowledge said "it is gratifying to see the DOJ take such a strong stand in favor of competition and against the wireless status quo." FCC policies that let a few carriers acquire massive spectrum holdings have limited "the ability of smaller, rural, and regional carriers to provide service," the group continued. "This leads to high prices and limited choice for consumers, and allows the largest carriers to use their power to control handsets and the pace of wireless innovation."