According to reports from the Dow Jones newswires and USA Today, FCC Chairman Kevin Martin has completed a draft of the proposed rules governing the upcoming 700 MHz spectrum auction.

And according to an interview with USA Today, he has included a hotly debated open access clause. Martin told USA Today, "Whoever wins this spectrum has to provide ... truly open broadband network - one that will open the door to a lot of innovative services for consumers."

According to the report, Martin hopes open access requirements will encourage innovation in the industry. He said his decisions came in part because he is concerned that U.S. carriers' current practices limit device and even feature availability. Whereas carriers in Europe have a much more open policy and have seen faster adoption of features such as Wi-Fi being included on handsets.

For its part, CTIA took umbrage with the proposal on a number of counts. "Contrary to what was reported in the media, many wireless providers are offering Wi-Fi-enabled devices, and consumers are purchasing and using those devices across the country, not just at company-branded hot-spots.  In fact, wireless consumers today have access to more than 700 different wireless handsets," said CTIA President and CEO Steve Largent, in a statement.

The Dow Jones report said that Martin's proposal attaches open access conditions to two blocks of spectrum that are each 11 MHz. That's only 22 MHz out of the total 60 MHz available, but it could mean an opening for Google and possible entrants looking to provide a national broadband Internet service that competes with traditional carriers offerings.

Though open access is a part of startup Frontline Wireless's auction proposal, the Dow Jones newswire report said that many of the company's suggestions were not included in Martin's initial proposal. The report did say that Martin had included a 10 MHz of nationally licensed spectrum that sits adjacent to spectrum set aside for public safety agencies. But that many of Frontline's clauses for this spectrum were left out, possibly making it less likely the startup will participate in the bidding.

The rules around this chunk of spectrum require the winning bidder to work with public safety agencies to create a network for the country's first responders. However, the licensee will be able to charge public safety agencies for access to the network.

The draft rules will be circulated to other members of the commission as early as today, with hopes that the rules will be finalized for the auction by the end of this month.

Spectrum auction proposals have been hotly debated over the last few months, with everyone from Google to consumers rights activists to members of Congress and the major wireless carriers all weighing in with advice on how the spectrum should and should not be divided and sold off. But this is only the beginning, once the FCC actually posts rules regarding the auction, we can expect to see even more action.