M2Z’s free broadband plan set for rejection

The Federal Communications Commission appeared poised to reject M2Z Networks Inc.’s plan to offer free nationwide broadband service on the 2155-2175 MHz band, a move likely to prompt a court challenge and refocus the campaign to integrate open access-wholesale requirements in the wireless space.
Once the anticipated dismissal of M2Z’s application happens, the FCC is expected to launch a rulemaking to determine what to do with the 2155-2175 MHz band. The two Democrats on the Republican-controlled FCC were expected to concur in the M2Z ruling.
In exchange for gaining access to valuable airwaves via a 15-year license, M2Z-co-founded by former FCC wireless chief John Muleta and backed by blue-chip Silicon Valley investors-promised to return to the U.S. Treasury 5% of gross revenues from a separate subscription service tier.
Earlier this month M2Z threatened to sue the FCC to force action on a plan that’s been pending before the agency for more than a year. M2Z now plans to make good on that threat.
The mobile-phone and wireless broadband sectors vehemently oppose an M2Z initiative that otherwise has attracted widespread grassroots support as well as backing recently from leading public safety organizations.
“If after 15 months-and violating the statute-the commission believes that it’s not in the public interest to have free, family-friendly nationwide broadband for American consumers, we look forward to their reasoned decision and hope it’s not arbitrary and capricious,” Muleta said.
FCC Chairman Kevin Martin and other Bush administration officials have been severely criticized for the United States’ lackluster broadband penetration ranking among nations. Compounding the problem for the administration is Bush’s unfilled goal of achieving universal, affordable broadband access by 2007.
Google Inc., consumer advocates and special interest groups pushed for open access and wholesale conditions on 700 MHz spectrum being auctioned early next year, but failed to get everything they sought from the FCC. They have now targeted the 2155-2175 MHz band as the next battleground. In addition to injecting open access and wholesale being in the coming debate on the 2155-2175 MHz band, key parties already have signaled they want federal regulators to consider creating an non-exclusive, unlicensed regime in the band.
“I think you’re going to see a bit of a re-run of 700 MHz,” said Blair Levin, a telecom analyst at Stifel, Nicolaus & Co. Inc. Levin cautioned, however, that 2155-2175 MHz spectrum is different than 700 MHz frequencies in terms of propagation characteristics and the unpaired channel structure of radio channels sought by M2Z.
The spectrum at issue is adjacent to the latter chunk of advanced wireless services spectrum (1710-1755 MHz and 2110-2155 MHz) auctioned by the FCC last year. Indeed, the 2155-2175 MHz band is officially classified as AWS spectrum.
Early indications of support by some consumer and special interest groups appeared to fade-though not totally melt away-in recent weeks as the fate of M2Z’s plan seemed to become imminent and palpable. Other parties also applied for the 2155-2175 MHz band, but the FCC has not sought public comment on them as it did with M2Z’s filing.
“If the commission does not grant the M2Z application, it should not allow the spectrum to remain fallow,” the Public Interest Spectrum Coalition told the FCC. “Instead, the commission should simultaneously release a [notice of proposed rulemaking] setting service and rules for the band.”
The group, which includes Consumers Union, Consumer Federation of America, the New America Foundation, Free Press, Public Knowledge and others, wanted the FCC to mandate that M2Z’s network would be open to devices and applications, operated under network neutrality principles and capacity made available on a wholesale basis. M2Z largely agreed to such network provisions, but the consumer-special interest group wanted firm regulatory conditions imposed.
“The commission has already taken steps to guarantee to the public a platform for open devices. Success of this platform remains uncertain, however, and the commission has left considerable discretion in the hands of the ultimate [700 MHz] licensee,” the group stated.