For the past eight months, M2Z Networks Inc. stood alone behind a plan that might actually aid President Bush’s quest for universal and affordable broadband service in the United States. Now it suddenly has company.
It comes in the form of petitions to deny M2Z’s application from the cellular and wireless broadband industries and from a handful of seemingly me-too applications to deliver free broadband service nationwide in the 2155-2175 MHz band. It is now a free-for-all, a somewhat predictable phenomenon that seems to materialize when an unconventional spectrum proposal is put before federal regulators and the wireless telecom establishment. As soon as it happens, an initiative’s chances of success almost immediately are thrown into question.
That is where M2Z, headed by former Federal Communications Commission wireless chief John Muleta, now finds itself. The startup waited through nearly four seasons for official FCC recognition. Now, with the agency finally putting its application on public notice, M2Z has more attention than it could have ever dreamed for. Or wanted.
M2Z appears to be a threat to established wireless players and a grand opportunity for others seeking entry into the wireless space.
The peanut gallery
Cellphone association CTIA said M2Z does not deserve a government subsidy to enter the competitive wireless industry, arguing it should pay for valuable spectrum like most everyone else and that its business plan is based on flawed assumptions.
T-Mobile USA Inc., the smallest national cellular operator that paid $4 billion for advanced wireless services spectrum to support broadband offerings, said M2Z’s plan “does not merit special treatment outside the normal licensing process.” No. 2 Verizon Wireless, which has spent billions on spectrum and a CDMA2000 1x EV-DO Revision A high-speed wireless data technology rollout, agreed, calling M2Z’s application “fatally flawed” and its business plan financially suspect. Leap Wireless International Inc., which paid $710 million for nearly 100 AWS licenses, accused M2Z of attempting an end run around the FCC’s regular licensing process.
The trade group representing firms serious about WiMAX deployment also urged the FCC to reject M2Z’s application. “M2Z has given the commission no reason to forego an auction of the 2155-2175 MHz band and instead give M2Z an exclusive nationwide license for that spectrum, subject only to the ‘soft conditions’ M2Z offers in its application,” the Wireless Communications Association told the FCC.
M2Z has attempted to cover all bases. While seeking to avoid an auction, M2Z said it would pay 5 percent of gross revenues from subscription services to the U.S. Treasury. Public-safety agencies could tap into a secondary interoperable data network. Cyber smutmeisters would be blocked from moving indecent content before the eyes of free users. Broadband access wouldn’t be in reach of all Americans by the end of 2007, as envisioned by the White House under the M2Z plan, but it would a decade from now using the requested 20 megahertz of spectrum currently designated for advanced wireless services.
WCA, which warned M2Z could cause harmful interference to adjacent wireless broadband licensees, isn’t buying any of it. “There is less to M2Z’s proposal than meets the eye,” stated the association.
NextWave proposes plans
However, one of WCA’s members-NextWave Broadband Inc.-filed an application earlier this month for the same frequencies sought by M2Z for essentially the same purpose. The only difference is NextWave wants the 2155-2175 MHz band available for nationwide broadband wireless on a shared basis.
“NextWave needs additional wireless spectrum that is compatible with time division duplexing applications, which NextWave has made clear to the commission in other rulemaking proceedings,” the company said. “The 2.1 GHz band presents one of the last opportunities for acquisition of TDD-compatible spectrum below 3 GHz, and cannot be granted to just one competitor in the broadband marketplace.” As such, NextWave recommended the FCC dismiss M2Z’s application so federal regulators can consider freeing up the spectrum for NextWave and perhaps others.
But it wouldn’t just be NextWave and M2Z fighting over the 2155-2175 MHz band. NetfeeUS, a wholly owned subsidiary of Speedus Corp., also applied for a non-exclusive nationwide wireless broadband license in the frequencies at issue. McElroy Electronics Corp., for its part, wants exclusive use of the 2155-2175 MHz band for a national wireless broadband network. Comnet Wireless L.L.C. wants in, too, and is ready to go to auction to settle the matter.
EchoStar Satellite L.L.C., one half of the satellite TV duopoly, suggested the FCC auction the 2155-2175 MHz band to make room for a new nationwide broadband player. EchoStar and DirectTV, which dropped out early of the AWS auction, want the FCC to set aside at lease one nationwide license in the 700 MHz auction later this year.
“Even if M2Z had made a more credible case, the proper forum for consideration of its [M2Z’s] proposal is a rulemaking proceeding, where all of the relevant issues . and interested parties can be given a full and fair hearing,” WCA stated.
The FCC is apt to embrace such a course of action.
In addition to the negative reaction to and the emulation of the M2Z plan, the FCC’s public record is replete with favorable comments from individuals, state officials and members of Congress.
