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GOP Leaders Rip Martin Spectrum Plan

WASHINGTON –- Google's  proposal for an open access 700 megahertz (MHz) spectrum auction came under fire from the U.S. House Republican leadership Tuesday morning.

Both Reps. Fred Upton (R-Mich.) and Joe Barton (R-Tex.) said the spectrum should go the highest bidder with no conditions attached.

Last week, the search and advertising giant said it was willing to put up a minimum of $4.6 billion to bid on the spectrum being vacated by television broadcasters if the Federal Communications Commission (FCC) allows for an open access network and wholesale services.

FCC Chairman Kevin Martin has already proposed dedicating approximately a third of spectrum for an open access network but stopped short of calling for wholesale access.

Martin hopes the conditions will help spark a third competitor to incumbent telephone carriers and cable companies for wireless broadband services.

Martin's plan is currently circulating through the FCC. The agency is expected to issue the final rules within the month. By law, the FCC must auction the spectrum by the end of January.

"I am very disappointed that a majority of the commission, including the chairman, wants to put conditions on this auction," Barton said at a House Subcommittee oversight hearing of the FCC.

Barton, the former chairman of the House Energy and Commerce Committee until the Democratic takeover this year, said he believes free markets should dictate the auction.

"I think the fewer fetters you have in terms of conditions on the auction, the more open the process and the better its going to be," he said. "I also think you're going to get more money if you do it that way."

Upton, the former chairman of the House Subcommittee on Telecommunications and the Internet, also supports a high-bidder-wins approach.

"The free market works best. If Google is really right that there is market demand for their model, they should be lining up to bid in a fair auction, without these requirements," Upton said.

"Google is, after all, one of the richest companies in the world, with a market cap of more than $160 billion. If Google wins the auction, it is free to operate the network as it proposes."

But Martin, a fellow Republican appointed as FCC chairman by President Bush, rejected Barton and Upton's idea. According to Martin, the January spectrum auction presents an important opportunity to bring a third broadband pipe into U.S. homes.

Open access under Martin's plan would allow consumers to connect any legal device to the wireless network. The rules for the spectrum would also contain prohibitions against the network provider blocking legal content, a key provision of network neutrality.

"A network more open to devices and applications can help ensure that the fruits of innovation on the edges of the network swiftly pass into the hands of consumers," Martin told the lawmakers.

"I have not, however, proposed to apply these same principles to entire 700 MHz band or to other existing networks."

Martin also stressed that if an open access requirement on the spectrum does not met his minimum bid of $4.6 billion, the spectrum would be re-auctioned without the mandates for open devices and applications.

The majority Democrats on the panel praised Martin's plan while encouraging the FCC to go further by imposing wholesale access requirements.

"I want to commend Chairman Martin for proposing in his plan... a beachhead for consumer choice and innovation in the wireless marketplace," Rep. Ed Markey (D-Mass.), chairman of the panel and a frequent FCC critic, said. "In context, Chairman Martin's plan is quite modest."

The auction may be one of the most lucrative in U.S. history with speculation that it will bring in as much as $20 billion. The spectrum is considered ideal for wireless broadband.

As originally envisioned by Congress, the spectrum would go to the highest bidder with the proceeds underwriting digital converter boxes for consumers and a national public safety wireless network. Excess proceeds will go to the federal treasury.