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FCC Seeks Comment on Free Internet Plan

Wireless access
Source: Reuters

The Federal Communications Commission is seeking feedback on a plan to provide free Internet access throughout the country with a new spectrum auction, the agency said Friday.

Under the proposed rules, the winning bidder for the new spectrum would have to filter out pornography and other inappropriate content. It would also carry an open-access requirement, so that all devices and software applications could run on the network.

Those provisions and the free-service requirement leave unclear who would actually bid on the proposed auction. The requirements could also spark opposition from incumbent wireless carriers, who have previously raised objections to open-access provisions.

"It doesn't seem like it's going to be of interest to any major carriers -- the restrictions are too heavy," Gartner analyst Tole Hart told InternetNews.com. "It's going to be somebody who wants to propose an advertising-based [Internet service] model."

The new auction would follow the largest spectrum sell-off in U.S. history. The FCC raised $19.6 billion in the valuable 700MHz auction.

The new auction would be for airwaves that sit much higher on the spectrum, in the 1.9GHz and 2.1GHz bands, and raises serious questions about the business model. A network built on these frequencies would not likely be conducive to bandwidth-intensive applications such as video, Hart said.

Higher spectrum means that the winning bidder would have to build more base stations to support minimum connection speeds.

The FCC's proposal requires that the winning bidder guarantee minimum download speeds of 768 kilobits per second.

The agency also stipulates that the winning bidder would have to provide free Internet access to half of the U.S. population within four years, and to at least 95 percent of the population by the close of a 10-year license term.

The problem is, free Internet access has largely failed as a business model. Companies such as EarthLink have been looking to unload the contracts to provide cities with free Wi-Fi access.

The business model for municipal Wi-Fi networks is increasingly seen as a tool for first responders and other city workers, rather than for consumer access to the Web.

The heavy infrastructure expenses that the spectrum would entail and the free-access requirement could make it a tough sell.

"It doesn't make sense to me," Hart said, noting that the winning bidder would likely end up in competition with the faster networks of the major wireless carriers.

The implementation requirements and the uncertain business prospects of the new spectrum suggest to Hart that the new auction would not be nearly the moneymaker for the government that the 700MHz auction was.

If the FCC holds to its proposed rules, he predicts that it could be similar to the auction of the 700MHz D Block, the band of spectrum that was to be partially allocated for public safety networks and failed to meet the minimum reserve price.

"If the price is low enough, you could probably get someone to pick up the spectrum," he said.