FEDERAL COMMUNICATIONS COMMISSION CHAIRMAN KEVIN MARTIN APPEARS DETERMINED to win approval for a free, family-friendly national wireless broadband plan, despite being forced to delay an upcoming vote on the measure after concerns were raised about potential interference to mobile-phone systems and about a content-filter provision.
“The chairman remains committed to advancing a proposal that will provide a broadband lifeline for Americans who currently do not have Internet access on what would be a portion of the band that would provide that service for free,” said an FCC spokesman. Martin has been a target of criticism because the U.S. trails more than a dozen countries in broadband penetration.
The agency spokesman added: “The chairman also believes that more time is needed to examine concerns on the interference issue, but he does not agree with some critics who are pushing for an interference standard that is more cumbersome than the restrictions that were set forth for both the AWS-1 spectrum and the 700
MHz spectrum in those respective auctions. The plan is to include this item on a July open-meeting agenda and thereafter set auction rules and commence an auction perhaps as early as December 2008.”
Martin had planned to vote on rules to auction frequencies at 2175-2180 MHz and 2155-2175 MHz – advanced wireless service bands 2 and 3 – at the June 12 meeting. The spectrum is adjacent to AWS-1 spectrum auctioned by the FCC in 2006. T-Mobile USA Inc., the smallest of the four national wireless carriers, was the top bidder in that auction after purchasing 120 licenses for nearly $4.2 billion. The carrier recently launched AWS I (1.7 GHz/2.1 GHz) operations in New York and plans to roll out service in that band in other markets as well this year.
T-Mobile USA has urged the FCC to establish power limits and out-of-band emission protections for spectrum contemplated in Martin’s wireless broadband proposal.
Cellular carriers recently intensified lobbying efforts on the issue, apparently prompting some commissioners to give into industry’s request to take more time to examine technical and other ramifications of the proposal. The Wall Street Journal published a scathing editorial on the Martin wireless broadband proposal, accusing him of again rigging an auction for another politically connected Silicon Valley company. The reference is to now-defunct Frontline Wireless L.L.C., which was headed by political insiders and had venture-capital backing, and dissolved shortly before the start of the 700 MHz auction. Frontline lobbied for rule changes to the D Block – a national public-safety/commercial license – that was left stranded because no bidder met the $1.3 billion reserve price.
It comes around again
Martin’s wireless broadband plan is quite similar to one advocated by venture-capital-funded M2Z Networks Inc. and rejected last year by the FCC because it included a mechanism to repay the government for the license that didn’t involve auction competition. M2Z, which has challenged the FCC ruling in federal appeals court, has been equally aggressive rebutting industry’s arguments in meetings with federal regulators. M2Z told the FCC interference concerns highlighted by T-Mobile USA and Verizon Wireless “are due to flawed and misguided business decisions rather than true technical concerns or valid spectrum policy.” M2Z claims the two carriers purchased foreign-made interference filters that are vulnerable to interference, despite being on notice by the FCC that operations in adjacent bands were a real possibility.
“The [FCC] proposal upends two decades of spectrum policy in favor of a specially tailored auction designed to advance the particular business model of a single company,” said cellular association CTIA. “Moreover, this business plan – including free broadband – has a track record of failure. The FCC order would in effect make the U.S. government a partner in this venture by shaping an auction (and sacrificing the corresponding revenue) to ensure the outcome. These rules would put at risk hundreds of millions of devices already in the hands of consumers. Moreover, the rules would undermine the significant efforts and investment made by the commission, other government agencies, carriers and manufacturers over the past decade to allocate, license and deploy service in the AWS-1.”
The AWS-1 band includes 1.7 GHz spectrum occupied in the past by the Department of Defense and other government agencies before it was re-designated for commercial wireless use.
Alarm bells
“The requirement to offer free nationwide mobile broadband raised huge alarm bells for the entire wireless industry since it could end up diluting the value of existing AWS licensees,” said Jessica Zufolo, an analyst at Medley Global Advisors L.L.C. She noted the aggressive buildout schedule – requiring the licensee to reach 50% of the population in four years and 95% of the population by the end of the 10-year license term – could work against prospective rural and regional bidders.
“The AWS-2 and AWS-3 bands could be the last opportunity for . regional carriers to acquire more spectrum,” Zufolo stated in a note. “The outcome of the 700 MHz auction is also still fresh on the minds of rural carriers that felt undermined by the FCC’s rules that enabled incumbents to acquire much of the lower A- and B-Block rural licenses as well as larger regional C-Block licenses.”
The American Civil Liberties Union told the FCC it would be unconstitutional to require filters to block pornography.
An FCC spokesman replied that Martin “believes there is a way to deal with the content filter issue by allowing adults to opt out, while still maintaining this important protection in place for children who would access the free Internet service.”
Meantime, Reps. Anna Eshoo (D-Calif.), Christopher Cannon (R-Utah) and Edward Markey (D-Mass.) are sponsoring a bill to foster deployment of a national, family-friendly wireless broadband network with open access.
