The U.S. Federal Communications Commission (FCC) on Wednesday kicked off efforts that could reshape the communications services available to airline passengers, deciding to auction off spectrum now set aside for air-to-ground phone service and proposing to relax its ban on the use of cellular phones in flight.

The FCC will auction radio frequencies in the 800MHz band in the hopes of spurring new onboard services that could include voice, data and broadband Internet access, the agency said in a statement. The services could be provided for commercial, military and general aviation. The FCC proposed three possible configurations of the spectrum, all of which are designed to ensure at least two operators in that band, and will let private industry settle on one.

There is 4MHz of spectrum in the 800MHz band set aside for air-to-ground communications, but only one service, Verizon Communications Inc.'s Airfone, is using that spectrum now, according to the FCC. The Airfone seatback phone service is expensive, limited to voice and not often used, Commissioner Michael Copps said in a statement on the decision. The FCC granted Verizon Airfone a new, 5-year, nonrenewable license on Wednesday, but limited that service to 1MHz of the 4MHz band.

Service providers that participate in the auction could choose an arrangement in which two carriers each have 3MHz of spectrum, overlapping in the middle part of the band, or one of two configurations that set aside a 3MHz band exclusively for one carrier and a 1MHz band exclusively for another.

"Our rules for the 800MHz commercial air-ground service has been locked in a narrowly defined technological and regulatory box and have kept passengers from using their wireless devices on planes," FCC Chairman Michael Powell said in a statement on the decision. The agency shouldn't dictate business plans by choosing only one band plan, he said. Commissioners Copps and Jonathan Adelstein voiced concern about auctioning an exclusive 3MHz license, saying the remaining 1MHz license wouldn't give a rival carrier enough bandwidth to effectively compete.

The agency also proposed allowing passengers to use standard wireless handsets and other devices via a "picocell," a small base station on the plane. Phones would also have to operate at their lowest power setting and not allow unwanted radio emissions to interfere with land-based cell networks. FCC rules currently prohibit using cell phones after takeoff, and U.S. Federal Aviation Administration (FAA) regulations restrict the use of any mobile phones and other portable electronic devices to prevent interference to onboard communications and navigation gear.

In its notice of proposed rulemaking (NPRM), the FCC is seeking public comment on whether the plan should apply only to devices operating in the 800MHz cellular band or include other types of phones, such as those in the PCS (Personal Communications Systems) or Advanced Wireless Services bands. It also wants ideas about how the 800MHz air-to-ground spectrum could be used as a "pipe" between an aircraft and a network on the ground. The agency is coordinating with the FAA, which is examining its own rules, according to the FCC statement.

In his statement on Wednesday's decisions, Copps welcomed the idea of exploring the issue but said he was worried about the possible fallout for airline passengers.

"Many airline passengers don't relish the idea of sitting next to someone yelling into their cell phones for an entire six-hour flight. I know I don't!" Copps wrote. He urged consumers to participate in the NPRM. "Meanwhile, we here at the Commission need to determine precisely what jurisdiction the FCC has over the annoying-seatmate issue."