FCC’s Martin bandies open-access license for 700 MHz auction

The mobile-phone industry reacted angrily to Federal Communications Commission Chairman Kevin Martin’s 700 MHz draft decision to impose an open-access-like condition on more than a third of the 60 megahertz to be auctioned, asserting such a regulation amounts to Silicon Valley welfare.
“Crafting special rules for a company with a market cap of $170 billion to address problems that don’t exist in our competitive market makes absolutely no sense whatsoever,” said Steve Largent, president of cellphone industry association CTIA, referring to Google Inc. Google has promoted the idea of an open-access license. “The bottom line is that the American taxpayer is at serious risk of losing billions of dollars because one of the wealthiest companies in the world has apparently convinced policy-makers that they require special auction rules that tailor-fit their business plan.”
The FCC today confirmed press reports that Martin wants open access applied to two pairs of 11 megahertz up for auction in December or January, a provision that could foster greater participation by Google and other Internet companies in wireless broadband.
Richard Whitt, Washington telecom and media counsel for Google, did not return calls for comment.
Martin put his 700 MHz plan on the street in advance of a tomorrow’s House telecom subcommittee hearing, which is expected to address the open-access controversy. It is unclear whether Martin’s open-access pitch will be enough to garner support from Commissioner Jonathan Adelstein, one of agency’s two Democrats and a supporter of putting wireless broadband functionality on par with high-speed Internet access offered by the cable TV-Bell telephone broadband duopoly.
The cellular industry has argued that, if conditions are attached to wireless licenses, government revenues from the 700 MHz auction will be less than the expected $12 billion to $15 billion due to dampened competition.
“Let’s be very clear about one critical fact: No party has ever been prohibited from bidding on spectrum at a public auction,” Largent said. “Any company that wants to provide wireless service is and always has been welcome to bid, and if successful at auction they are free do whatever they wish with the spectrum they have purchased. We sincerely hope the commission recognizes the indisputable facts of this debate and decides on a policy that places all bidders on equal footing.”
No. 2 mobile-phone carrier Verizon Wireless declined to comment on Martin’s 700 MHz blueprint, while No. 1 AT&T Mobility did not respond to e-mail requests for reaction.
Martin’s 700 MHz plan also tackles the public-safety angle, requiring the winner of a 10-megahertz block to work with public-safety agencies that occupy adjacent frequencies. The 10-megahertz block would be separate from the two pairs of 11 megahertz for open access.
Martin’s plan is expected to be circulated to the other four commissioners this evening. Public-safety officials declined to comment on the Martin plan.
Specific details of the plan were not immediately available.
“The chairman has proposed that the winner of one larger piece of spectrum in the upcoming spectrum auction must build a network that allows consumers to attach any device or run any application that they choose to, provided they don’t interfere with network management. This is to enable consumers to benefit from innovation and all that wireless broadband has to offer,” stated an FCC official. Martin and other telecom officials in the Bush administration are frequent targets of criticism because the U.S. lags other countries in broadband penetration.
The Martin 700 MHz draft draws on open-access and public-safety components in the Frontline Wireless proposal, but the FCC chairman goes about addressing first-responder communications and wireless broadband issues far differently.
“This approach could mark a historic step in the right direction to transform a wireless industry that has rapidly consolidated, reducing competition, innovation and choice,” stated Frontline. But the startup company said the FCC needs to go further to advance wireless broadband and public-safety communications in the United States.
Public Knowledge, an advocacy group that supports net neutrality and open access, agrees. “It appears as if the chairman has significantly altered the definition of open access,” said Art Brodsky, spokesman for the organization. Brodsky said open access typically is associated with a wholesale mandate.