FCC embraces open access for 700MHz auction

The FCC imposes some open-access rules on parts of 62MHz of spectrum to be auctioned by early next year

The U.S. Federal Communications Commission on Tuesday set the conditions on a chunk of valuable wireless spectrum to be auctioned by early next year, putting open-access rules on a third of the spectrum.

The FCC voted to require that the winner of 22MHz of spectrum allow any wireless devices to connect to the network, meaning wireless telephone customers could bring their handset devices from other carriers. The FCC, in so-called open-access rules, also prohibited the winning bidder on the 22MHz block of spectrum from blocking or slowing wireless and Web content from competitors.

The FCC's action represented a middle ground between some telecom carriers, which wanted no conditions, and some consumer advocacy groups and Google, which called on the commission to require that winning bidders also resell the spectrum at wholesale rates to competitors. The commission declined to adopt wholesale access rules.

Google praised the conditions but called them incomplete, in a blog posting on Tuesday. "Just two months ago, the notion that the FCC would take such a big step forward to give consumers meaningful choice through this auction seemed unlikely at best," Richard Whitt, Washington telecom and media counsel for Google, wrote in the blog.

Still, consumers would have scored a more complete victory if the FCC had also adopted two other proposals from Google, he wrote. That would have paved the way for real competition, he wrote.

Google plans to examine the full text of the rules, expected to be released in a few weeks, before deciding whether it will bid in the auction, he wrote.

The FCC also addressed spectrum needs for emergency response agencies by marrying 10MHz of commercial spectrum with 12MHz of spectrum in a public-private partnership designed to create a nationwide network for police and fire departments. The FCC largely adopted a plan advanced by Frontline Wireless, a startup made up of wireless industry veterans and former FCC officials who called for a marriage of commercial bidders and public safety agencies.

Commissioner Michael Copps praised his colleagues' decision, saying public safety agencies have long needed the additional spectrum. "This represents a tremendous step forward," he said of the public safety plan.

But Copps, a Democrat, complained that the FCC didn't require wholesale access rules on part of the spectrum. The commission missed an opportunity to create a third broadband provider in competition with large telecom and cable providers, he said.

The commission's rules on 22MHz of the spectrum are a "meaningful, but not perfect" step toward open access, added Commissioner Jonathan Adelstein, a fellow Democrat. "I'm concerned we missed an opportunity to provide an elusive third broadband channel into the home," he added.

Republican Commissioner Deborah Taylor Tate said she was "lukewarm" about the open-access rules the FCC adopted. The rule to allow open applications could pose risks, such as a crowded network, she said.

"The network provider should be able to reasonably manage the foreign applications on its network," she said.

The FCC plans to sell 62MHz of spectrum in the 700MHz band by early next year, in auctions expected to raise more than US$10 billion. The spectrum, called "beachfront property" by many observers, is ideal for long-range wireless telephone and broadband services, with signals that travel up to four times farther than in higher spectrum bands.

The spectrum is currently controlled by U.S. television stations using channels 52 to 69. The U.S. Congress in late 2005 passed legislation that requires the stations to move to digital broadcasts and abandon spectrum in the 700MHz band by February 2009.

The spectrum conditions have been the focus of intense debate in recent months. Advocacy groups such as Public Knowledge and Consumers Union called for open-access rules. That open access plan, also endorsed by Google and Frontline, would have required auction winners to provide wholesale access to competitors.

The auction conditions were needed, the consumer groups argued, because they represented the only chance in the near future for a new broadband service to emerge in competition with large telecom and cable providers. Without wholesale conditions, the large incumbent providers could buy the spectrum and stockpile it, they argued.

Opposing such conditions were several carriers, including Verizon Communications Inc., as well as some conservative economists and think tanks. They argued that auction conditions would lead to fewer bids and would hamstring carriers from offering innovative new services.

AT&T in recent weeks had softened its stance on open access rules, saying it could live with a prohibition against blocking or slowing Web content from competitors and a requirement that it allow devices of consumers' choosing.

Nancy Gohring in Seattle contributed to this story.

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Grant Gross

IDG News Service

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