Federal regulators plan to set aside a portion of choice spectrum for smaller wireless carriers at an auction of TV airwaves scheduled for next year.

At the spectrum auction, TV stations will take bids to give up their valuable low-band spectrum so it can be resold to the wireless carriers to meet the exploding demand for online video.

According to people familiar with the matter, the Federal Communications Commission plans to reserve a portion of that spectrum to prevent the two largest wireless carriers from purchasing it all.

Asked about the plan, the agency released a statement from Chairman Tom Wheeler, who said: "All who want to participate in the auction will be able to bid...In order to assure coverage and competition in rural America, it may be necessary to assure no one can monopolize the bidding, "

Lower-frequency spectrum--below 1 gigahertz--is generally considered premium because it can cover greater distances and travel through walls and other barriers. The two largest wireless carriers, AT&T Inc. and Verizon Wireless, control the vast majority of the low-band spectrum licensed for wireless use. Sprint Corp. and T-Mobile US Inc. have argued they need access to more low-band spectrum to compete on a national basis, and they see the 2015 auction as a unique opportunity to acquire it.

The FCC has been considering how to ensure that smaller wireless companies have a chance to compete at the sale.

The plan they devised would set aside a slice of the spectrum--up to 30 megahertz--but only after bidding in each market reached a certain threshold. After the threshold was reached, companies that held at least a third of the low-band spectrum in that market wouldn't be allowed to bid. In most markets that would exclude AT&T and Verizon from bidding on the restricted spectrum, and in some cases it would affect smaller regional carriers, such as U.S. Cellular Corp. and C Spire Wireless, that hold low-band spectrum in specific markets.

The FCC's threshold for setting aside spectrum in a market hasn't yet been determined, but it could include some combination of the overall bids in the market, or the price per megahertz, according to people familiar with the plan. If there wasn't sufficient demand for the restricted spectrum in a market, it would be returned back to the unrestricted pool so anyone could bid on it.

The FCC's plan represents a victory for Sprint and T-Mobile, which have lobbied fiercely for limits on how much low-band spectrum AT&T and Verizon can buy at the auction. Both companies and several public-interest groups have argued that absent such limits, the two companies might attempt to purchase all the spectrum licenses to stymie competitors.

Their argument received a boost one year ago, when the Justice Department encouraged the FCC to ensure that smaller carriers had a shot at winning spectrum at the auction. However, the FCC's rules could draw fire in Congress, where House Republicans have been adamant that the FCC shouldn't attempt to limit bidders at the auction in any way.

In a separate proceeding, the FCC will consider changing how it calculates a company's spectrum holdings in a local market, whether it is high-band or low-band, for purposes of evaluating spectrum deals.

When a company attempts to purchase spectrum licenses, the FCC considers whether the purchaser holds more than a third of the spectrum available for wireless use in the affected areas. If a company exceeds the one-third cap, it triggers a deeper review, but not an automatic rejection.

Under the proposed changes, the FCC would expand the amount of spectrum considered suitable for wireless, meaning the amount needed to reach the one-third cap would increase.

Among the companies affected would be Sprint and Dish Network Corp., which both hold significant amounts of spectrum that wasn't previously considered suitable for wireless, but will now be counted against the cap.

Also as part of this action, the FCC would start evaluating whether a company holds more than a third of the low-band spectrum available in a market, with the cap triggering a deeper review. Participants who exceeded the one-third cap on low-band spectrum by winning licenses at the 2015 auction would be grandfathered in under the new rules.

Write to Gautham Nagesh at gautham.nagesh@wsj.com

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