FCC Set to Rule on Broadband Spectrum

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

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

“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

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.

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