AT&T might withdraw from next year's incentive spectrum auction if the FCC imposes rules on the proceedings that make it difficult for AT&T to secure the spectrum it wants, the company said this week.

Specifically, AT&T is concerned that the FCC wants to restrict just how much spectrum a larger company can purchase in any one market. The idea is to prevent huge carriers like AT&T or Verizon from buying everything, allowing smaller players - including T-Mobile and Sprint - to have a chance. But the larger carriers argue that restrictions might not allow them to purchase enough spectrum to make the investment worthwhile.

"As we understand it, after a certain aggregate threshold is reached in the auction (which threshold currently remains undefined), staff is proposing that certain significant bidding restrictions be imposed on any bidder that has more than one-third of the available low band spectrum in a market," Joan Marsh, vice president of federal regulatory issues at AT&T, said in a Wednesday letter submitted to the FCC. "AT&T estimates that if such restrictions are adopted, it will be restricted in markets covering over 70 percent of U.S. [points of presence] POPs."

Marsh's letter summarized a Monday meeting she had with FCC Chairman Tom Wheeler's legal advisor, Renee Gregory. At that meeting, she told Gregory that "such restrictions would put AT&T in an untenable position, forcing AT&T to reevaluate its potential participation in the auction."

Basically, the bigger your spectrum allocation, the faster your service can potentially be. When AT&T first launched its 4G LTE network in 2011, for example, PCMag noted lightning fast speed in Houston but sluggish speed in Chicago - and the culprit was likely spectrum. At the time, AT&T had 24 MHz of spectrum in Texas but only 12 MHz in Chicago.

According to AT&T, restrictions would make it very difficult for the company to purchase desirable spectrum blocks.

"While the restrictions vary by band plan, in a 60 MHz band plan a full 50 percent of the blocks (3 out of 6) would be set aside for non-restricted bidders," Marsh said. "And with a 50 MHz band plan, 40 percent of the blocks (2 out of 5) would be set aside for non-restricted bidders. Even with a 70 MHz band plan, 42 percent of the blocks (3 out of 7) are set aside."

"The auction restrictions as proposed make it a virtual certainty that, for many proposed band plans, either AT&T or Verizon or both would be limited by the auction restrictions to a fragmented, uneconomic and inefficient 600 MHz footprint," she concluded.

The auction, meanwhile, will take unused spectrum currently owned by TV broadcasters and sell it to wireless carriers who need it to keep up with all the bandwidth-heavy gadgets running on their networks. It was initially supposed to happen this year, but in the wake of the disastrous Healthcare.gov rollout, Chairman Wheeler opted to push it to 2015 to make sure everything ran smoothly. Among the things to get figured out before then are these potential restrictions on bidders.