M2Z inks wholesale deal with rural phone companies

M2Z Networks Inc. said it reached a wholesale wireless broadband pact with rural telephone companies, a business relationship that depends on the startup winning a legal challenge against the Federal Communications Commission or winning a license after rules are set for the 2155 MHz-2175 MHz band.
“M2Z has always been committed to a wholesale business model and partnerships like these will help our company achieve our goal of closing the digital divide in the United States,” said John Muleta, co-founder and CEO of M2Z. “We look forward to working with BWP [broadband wireless partners] and others to ensure the achievement of that goal.”
The agreement calls for M2Z to provide high-speed wireless broadband service on a wholesale basis to 20 rural wireline carriers, which in turn they would sell as part of bundled offerings to their customers. In addition, M2Z would purchase access to rural telecom facilities and coordinate marketing with rural telephone service providers. The participating rural telecom carriers serve 2 million customers in 35 states.
Muleta said the accord demonstrates the need for a wholesale nationwide broadband network in the 2155 MHz-2175 MHz band, notwithstanding the FCC’s rejection of M2Z’s application. M2Z has sued the FCC in the U.S. Court of Appeals for the District of Columbia Circuit. Muleta noted the FCC declined to extend roaming to wireless broadband data in a recent decision clarifying that voice roaming is an obligation of mobile-phone carriers. He added that new FCC 700 MHz rules fail to mandate wholesale in any of the 62 megahertz of spectrum up for auction early next year.
The FCC late last month threw out M2Z’s application to offer free nationwide wireless broadband access. The proposal attracted grassroots support, but was strongly opposed by the mobile-phone and wireless broadband sectors, which argued M2Z should compete in an auction. M2Z had offered to pay 5% of gross revenues from subscription services to the U.S. Treasury in exchange for a nationwide license.
In the FCC Aug. 31 ruling on M2Z, FCC Chairman Kevin Martin said the agency plans shortly to launch a rulemaking on the 2155 MHz-2175 MHz band. The commission has yet to act, however.