FCC Set to Rule on Broadband Spectrum
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With some of the most valuable airwaves ever put up for sale in the United States at stake, the Federal Communications Commission (FCC) is scheduled to issue the rules today for a January spectrum auction that could change the American wireless landscape.
Once considered a foregone, slam-dunk win for incumbent wireless carriers such as AT&T and Verizon, FCC Chairman Kevin Martin scrambled that picture earlier this month by releasing a draft set of auction rules that could open the door to new entrants like Google and other deep-pocketed tech companies.
The landmark sale of the spectrum being deserted by television broadcasters as part of the digital TV transition is considered ideal for delivering advanced wireless services, including broadband that meets or exceeds the speeds of DSL or cable modems.
Under Martin's proposal, more than a third of the spectrum for sale enough to build a national network would be reserved for an open-access platform that would allow consumers to connect any legal device or software to the network. Carriers would also be prohibited from blocking legal Internet content.
Another chunk of the airwaves is set aside for the successful bidder to build and maintain a national, interoperable first responder network. Smaller pieces of spectrum will also be available for regional carriers to build networks or for incumbent carriers to help fill out their national footprints.
Currently, incumbent carriers dictate what devices and services can be used on their networks. Martin's plan does not change those rules for existing networks.
"The upcoming auction provides a rare chance to promote a more open platform without disrupting existing networks or business plans," Martin said last week at a U.S. House hearing on the spectrum sale.
If approved by his fellow FCC commissioners Tuesday morning, Martin's plan could, however, change the incumbent carriers' notion of gobbling up all the spectrum in sight. The incumbents favor an unconditional sale to the highest bidder.
Google, on the other hand, has been lobbying Congress and the FCC for months to condition the auction along open access lines. While pleased with Martin's plan, Google wants additional conditions set on the sale that include requiring the winning bidder to make spectrum available at wholesale prices.
Google also wants the FCC to require the winning bidder to allow third parties such as Internet service providers to interconnect at any technically feasible point in the network.
"All four of these conditions adopted together would promote a spirit of openness and could spur additional forms of competition from Web-based entities, such as software applications providers, content providers, handset makers and ISPs," Chris Sacca, Google's head of special initiatives, wrote on the company's blog.
Google has pledged a minimum bid of $4.6 billion if the FCC meets its demands, which prompted criticism from the incumbent carriers who claim the search and advertising giant is attempting to rig the auction in its favor.
"Crafting special rules for a company with a market cap of $170 billion to address problems that don't exist in our competitive market makes absolutely no sense whatsoever," CTIA, the wireless trade association, said in a typical broadside against Google's idea.
The auction is expected to bring in $15 billion to $20 billion to the U.S. coffers. Proceeds from the auction are earmarked for a $990 million subsidy fund to help consumers buy digital television converter boxes, $5 million for a consumer education program about the DTV transition and funds for first responders. After those earmarks, any remaining funds will go directly to reducing the federal deficit.