Former FCC Chair Stumps For Spectrum
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STANFORD, Calif. -- After a string of engineering talks, the annual Hot Chips conference took a turn toward Washington as former Federal Communications Commission (FCC) Chairman Reed Hundt took the stage for the afternoon keynote.
At first, it was a stand-up routine, with Hundt making self-deprecating jokes and taking a few shots at Washington.
"It really is a battlefield. It's a verbal battlefield but occasionally people do threaten career destruction and economic devastation, occasionally being every day," he told the audience.
But then he got around to the point of his speech: encouraging the final wireless spectrum, the 700 MHz band, to remain in the hands of those who would keep it freely accessible to all. That includes himself and his company Frontline Wireless, of which he is a co-founder and vice chairman.
"What if we privatized all the roads, made them toll roads, and then the owner said 'only our trucks can ride on them,' and then they decide on what content the trucks can carry. You might say to yourself, 'I got this idea that the road would be common to all carriers,'" he said.
He was referring to AT&T's attempts to impose its business model on the major Internet companies. Both AT&T and Verizon have floated tentative plans to charge content providers extra fees based on bandwidth consumption. Neither telecom giant has implemented the idea.
Hundt said that as part of the deal to approve the AT&T-SBC merger, AT&T was forced to adopt a neutrality policy until January 2009, a date he said was not a coincidence. By then, there will be a new president who would hopefully support greater government involvement in enforcing net neutrality.
Hundt said he created his company to go to the FCC to deal with the last auction because there is no spectrum left. "Here's the truth, this is the last auction," he said. "There's none left to auction off after this."
He made the point that in 2001, the FCC decision to allow individual wireless providers to own large portions of the spectrum put big companies in a very dominant position, and he specifically named AT&T and Verizon as the prime offenders in building a dominant position.
The aim of his new company is to build a national network where the frequencies reach everyone in the U.S. and it is completely open to all users, with no blocking of content. Frontline, in particular, is interested in bidding for the spectrum dedicated to a public-private network for first responders. Excess capacity will be for commercial use.
"Yes, there will be different charges for volume but no, they won't be able to discriminate," he said. "If we really want an open, no lock network to reach 99 percent of the U.S., we need to have as a winning bidder a company that has embedded in its model this will be a servant of America and not the master of our future."
Google is also interested in obtaining a piece of spectrum to ride the expected wireless boom. Tuesday, Google CEO Eric Schmidt said the search and online advertising giant would "probably" participate in the January 700 MHz auction.
Hundt's politics were fairly blatant and he made it clear he does not see the current administration as a friend of network neutrality. He made reference to the time in the 1800s when Senators were selected, not elected, "Like we do with the president now." It worked, drawing applause. His comment that the next presidential election would determine whether the Internet remains free was met with less applause.
"We have not had an anti-trust law at all since 2001," he said. "Our politics since 2001 have been a combination of consolidation and combination because there was the feeling we needed it to compete with global competition and because of the war on terror."
He said that more than 300,000 e-mails were sent to the FCC demanding the 700MHz spectrum be kept open, but then said that because the e-mails were all sponsored by MoveOn.org, they were counted as a single e-mail.
Hundt wants rules in the auction that would help a small company like his against big firms like Verizon and AT&T, and he admits it might be a losing battle. "How do we win against richer auctioneers? It may be a hopeless quest, it could be that way. I'm starting on my knees but I'll be happy to get on my belly and crawl like a reptile," he said.