Mobile service providers unhappy with FCC auction plan

AT&T, T-Mobile, Verizon Wireless and other mobile service providers are crying foul over the FCC's plan for an upcoming spectrum auction, arguing it would interfere with their operations in adjacent airwaves and impose conditions that largely benefit one bidder.

Comment on this article in The Forum.The dust-up involves a proposal floated by FCC Chairman Kevin Martin for the auction of frequencies in the so-called Advanced Wireless Service band to be used for high-speed Internet access. Supporters view the conditions as consumer-friendly, while critics see restrictions favoring Silicon Valley-based M2Z Networks, whose founder and CEO, John Muleta, ran the FCC's wireless bureau from 2003 to 2005 and held other agency titles in the 1990s.

Carriers are particularly concerned that the winner must use some of the airwaves to provide a free, nationwide, wireless broadband service and make the spectrum accessible to outside parties through "open-access" requirements.

"It reduces interest in the spectrum," Kathleen O'Brien Ham, vice-president of federal regulatory at T-Mobile, said of the tentative conditions. She warned that some companies "will be detracted from bidding if that's not their business plan."

Paul Garnett, assistant vice-president for regulatory affairs at CTIA, the wireless association, said "it doesn't make sense for the FCC to mandate a business model" and that if M2Z wants to offer free broadband, it should do so on its own.

M2Z has pledged to provide free Internet connectivity to 95 percent of the United States in a way that would benefit citizens and public safety organizations. "They're sort of guising it up that we're somehow the beneficiaries," Muleta said, insisting that the conditions would enable the introduction of a new national provider.

During a June 17 speech in Seoul, South Korea, Martin described the free broadband idea as a "lifeline, basic, lower-speed service" that would make the technology more widely available.

The industry has the support of two key lawmakers, House Energy and Commerce ranking member Joe Barton and Energy and Commerce Telecommunications and the Internet Subcommittee ranking member Cliff Stearns, R-Fla., who urged Martin in a June 30 letter to drop his recommended conditions. They warned the chairman not to tailor the auction "largely to the business model of a single party," an apparent reference to M2Z, which they did not cite by name.

While the FCC proposal has won endorsements from consumer advocacy groups, some are worried that M2Z's plan to block pornographic content could abridge First Amendment rights and undermine the Internet's openness. Efforts to craft rules for auctioning the frequencies are considered to be on a fast track, although industry opposition helped postpone a planned vote last month. Wireless companies are seeking further delays so the agency can review their interference concerns.

The dispute over conditions comes on the heels of another controversial auction that ended in March. Verizon Wireless spent nearly $5 billion to secure spectrum subject to open access despite initially opposing the restrictions along with other carriers. Ironically, M2Z is battling the commission before the U.S. Court of Appeals for the District of Columbia over the agency's decision last year rejecting M2Z's request to be awarded a spectrum license for free, and without bidding at auction.