In what is widely considered the last chance for the United States to create an advanced, truly open national broadband network, the FCC compromised.
At the end of a politically contentious debate, the commission voted 4-1 to give half of the spectrum to a new breed of technology companies like Google and Frontline Wireless and half to the old guard of wireless carriers, led by AT&T and Verizon. The classic compromise left no one clearly on top.
The compromise fell considerably short of the vision advocated by consumer groups and a group of Silicon Valley high-tech companies. “I am afraid we may have missed a golden opportunity to open that elusive third channel into the home,” said Democratic commissioner Jonathan Adelstein after the vote.
Nonetheless, analysts said full impact of the FCC’s actions probably wouldn’t be known until months from now, when the auction finally begins.
The decision, with Republican commissioner Robert McDowell the lone dissenter, was a partial victory for Google and others who pushed for greater competition in wireless services. They lobbied the commission to create an open-access wireless network that would allow the owners of the spectrum to sell portions of it wholesale to other companies.
The idea was to break the grip of today’s major wireless carriers who operate closed networks and allow only their own devices to operate on those networks.
The FCC did not approve the provision that would have required the winner of the auction to sell access to its network on a wholesale basis to other companies. They did, however, create rules that would let customers use any phone and software they want on networks using about one-third of the spectrum to be auctioned.
While the exact language of the new rules has not been made public, the “New York Times” reported that it appears that any company that buys the new spectrum will have to leave it open to devices it does not approve or control.
That means, for example, if AT&T were to buy spectrum, consumers would have to pay the wireless carrier for access to its network, but they could use devices of their own choosing on it. Currently, the carriers decide what devices are used on their networks and therefore control many of the services and software available to consumers.
The carriers contend this permits them to control the quality of the customer’s experience. Jason Devitt, cofounder and chief executive of Skydeck, a Silicon Valley wireless content firm, told the FCC that the opposite is true. The wireless industry, he said, has failed to innovate. “Ten years and we have ring tones,” he said.
The FCC ruling does not affect the existing spectrum. It misses a unique opportunity to break the corporate stronghold over American wireless technology. The 700MHz wireless band has been referred to as the “last beachfront property” in the radio spectrum.
The spectrum is being freed for new digital wireless services, including emergency communications, by television stations that are abandoning analog and moving to digital technology. By law, the spectrum auction must start no later than Jan. 28, 2008.
The FCC’s rules resulted from a compromise between Republican chairman Kevin Martin and two Democrat commissioners, Michael J. Copps and Jonathan S. Adelstein, both who favored the wholesale rule that Google proposed.
Even with the failure to win over the FCC, Google did not rule out entering the auction. AT&T called the FCC’s action “a reasonable balance,” while Verizon had no comment.
