FREE, FAMILY-FRIENDLY WIRELESS broadband for the masses may be on the way. So may messy litigation to keep it grounded.
The Federal Communications Commission tentatively concluded operations in the advanced wireless services-3 band will not interfere with T-Mobile USA Inc. and others licensed in the advanced wireless services-1 band, moving the agency closer to issuing final rules for an auction next year that could prove disruptive for the telephone
and cable high-speed Internet duopoly.
FCC Chairman Kevin Martin, forced to shoulder much of the blame for lagging broadband penetration in contrast to other countries, is championing a plan that would require the winning bidder of a national AWS-3 license to set aside 25% of wireless network capacity for free broadband. The free-broadband tier would be subject to filtering to block out smut. In addition, the AWS-3 wireless broadband network would have to be open to third-party devices.
No cooperation
Martin wants to approve AWS-3 rules before the end of the year, but he said he is having trouble getting cooperation from other commissioners.
The FCC’s Office of Engineering and Technology conducted an analysis of laboratory bench tests conducted Sept. 3-5 in Seattle on the potential for interference from operations in the AWS-3 band – 2155-2180 MHz – to those in the AWS-1 band at 2110-2155 MHz. While finding AWS-3 devices would not disrupt AWS-1 communications, the report noted the FCC “in the past adopted less stringent out-of-band emissions standards under flexible service rules whereby the licensees and industry work together cooperatively to manage potential interference.”
But don’t look for T-Mobile USA and M2Z Networks Inc. to try to find common ground. The stakes are huge for each, one an established national wireless operator competing against three larger competitors and the other a Silicon Valley-backed startup anxious to wreak havoc in the broadband market.
T-Mobile USA, which spent $4.2 billion on 120 AWS-1 licenses at an auction two years ago, is counting on big holiday sales with the rollout of 3G service in more than two dozen markets by year’s end. The carrier said the Seattle testing – as well as previous spectrum analysis – pointed to interference from AWS-3 transmissions. Other wireless firms and industry association CTIA backed T-Mobile USA’s interpretation of the testing results.
“Contrary to the commission’s analysis, we believe the testing in Seattle confirmed that operation of an M2Z-like service in the AWS band will cause interference to AWS-1 customers,” said Christopher Guttman-McCabe, VP for regulatory affairs at CTIA. “No one has denied that interference will occur, not even M2Z. For a commission that is focused on E-911 and public safety – and rightly so – I am troubled that they would consider authorizing a service that will harm consumers. As NENA [the National Emergency Number Association] said in a recent filing, ‘consumers cannot be in a position in which the most important calls they make, 911 calls, are disrupted or blocked.’ “
Menlo Park, Calif.-based M2Z, foiled in its initial attempt to obtain an AWS-3 national license before the FCC decided to auction the spectrum, countered that Seattle testing did not prove AWS-3 TDD devices would not be able to peacefully coexist with AWS-1 mobile-phone communications. M2Z’s backers include Kleiner, Perkins, Caufield and Byers, Charles River Ventures and Redpoint Ventures, three prominent venture capital firms with $5 billion under management.
Intel Corp., the world’s top chipmaker with a huge vested interest in seeing WiMAX take off, told the FCC it agreed with M2Z’s assessment that AWS-3 TDD operations would not pose a serious interference threat to T-Mobile USA and other licensees on adjacent frequencies.
M2Z said the FCC report vindicates its position and testing by other expert bodies.
“M2Z Networks has long advocated that the AWS-3 spectrum band be used to provide two-way nationwide broadband services. The report released . by the FCC’s Office of Engineering and Technology confirms our long-held belief that two-way broadband service in AWS-3 will not cause harmful interference to adjacent bands,” said M2Z CEO John Muleta. “Moreover, this comprehensive FCC report and its findings are consistent not only with the FCC’s own precedents in the 700 MHz band and the 2.5 GHz band but also with the findings of other progressive international regulators like the United Kingdom’s spectrum regulator Ofcom.
Muleta said further delay in the AWS-3 rulemaking is not warranted.
“The time is now ripe for a decision on the FCC’s proposal to make the AWS-3 band available for a free lifeline broadband service,” said Muleta, former chief of the FCC’s wireless bureau before launching M2Z. “There is no longer any need for American consumers, the public interest and the FCC’s regulatory process to be held hostage as it has been for the last five months by incumbent carriers like Deutsche Telekom’s T-Mobile and AT&T [Mobility] who have used unfounded claims of interference to disguise their intent to prevent the introduction of new broadband competition in the AWS-3 band.”
Did anyone say lawsuit?
T-Mobile USA blasted the FCC’s evaluation of Seattle testing data.
“While we are glad the FCC engineers finally put their observations on the record, we have serious concerns that their analysis is flawed and relies on factors that were not the subject of the testing, while ignoring other important data in the record,” said Kathleen Ham, VP for federal regulatory affairs at T-Mobile USA.
Ham added: “In light of this, we are concerned that the result was predetermined unfairly. We and the multiple parties concerned about interference will strongly urge the FCC to provide for sufficient time for comment on their report before any FCC action on these rules. Such a process has been encouraged by various parties and members of Congress and is only fair given the impact to existing AWS licensees and their customers and because of the complexity of the technical rules involved.”
Judging from its recent meetings with FCC lawyers, T-Mobile USA may be laying the groundwork for a lawsuit against the FCC.
“The AWS-1 auction created an enforceable contract between the government and licensees. . Allowing the use of TDD in the AWS-3 band would breach the government’s auction contracts with the E- and F-Block AWS-1 licensees,” T-Mobile USA officials told the FCC’s Office of General Counsel. In coming weeks, the No. 4 wireless provider is expected to ratchet up its criticism of what it considers a highly unfair regulatory process to craft AWS-3 technical rules.
M2Z short on details
M2Z’s Muleta accused T-Mobile USA of trying to concoct another distraction to derail Martin’s AWS-3 initiative.
“There’s no enforceable contract in spectrum [licensing],” he said. Muleta added that he does not believe the erratic economy – including the current credit crunch – would hamper the company’s ambitious business plan if it were to win a national license in an auction next year. He said capital would be available through investors, equipment vendors, Internet service providers and others with long-term strategic investment objectives.
Muleta declined to say how much the national network could cost to build and operate. In addition to free wireless Internet access, Muleta said M2Z would offer subscription wireless broadband service at between $25 and $30 per month.
