FCC Chairman Kevin Martin's
plan to bring open access to one-third of the 700 MHz
spectrum band, which will hit the auction block next
January, appears to have the necessary support of two out of
four commissioners. The plan is also backed by AT&T, which
initially opposed any open access. It falls short of
Google's request for total open access.
During a congressional hearing Tuesday before the House
Subcommittee on Telecommunications and the Internet, members
of the Federal Communications Commission (FCC) came out in
favor of a plan that would bring open access to one-third of
the airwaves set for auction in January.
The 700 MHz band spectrum used by broadcast television
stations will be available to the highest bidder once the
switch to digital broadcasts takes place in February 2009.
The FCC will auction off those soon-to-be-vacant airwaves in
It was the first public indication of how the commissioners
viewed the proposal put forth by FCC Chairman Kevin Martin
two weeks ago.
"A network more open to devices and applications can help
ensure that the fruits of innovation on the edges of the
network swiftly pass into the hands of consumers," Martin
told the House Energy and Commerce subcommittee. "Consumers
would be able to use the wireless device of their choice and
download whatever software they want."
Three out of the five commissioners told congressional
members they supported the proposal to require the license
winner to make a portion of the airwaves accessible to any
wireless device, application and service. Martin has set the
minimum bid for this block of the airwaves spectrum at
US$4.6 billion. If bidders do not make the minimum bid, the
auction will be held again without the open-access
Opening the Airwaves
Mobile phone users in the U.S., Martin said, are too often
asked to discard old phones and purchase new phones in order
to switch cell phone carriers. It is the wireless provider
who determines what applications are loaded on that new
phone, not the consumer.
"Wireless consumers in many other countries face fewer
restraints: for example, they can take their cell phones
with them when they change carriers, and they can use widely
available WiFi networks -- available in their homes, at the
airport or at other hotspots -- to access the Internet," he
The upcoming auction "provides a rare chance to promote a
more open platform without disrupting existing networks or
business plans," Martin said.
The FCC's two Democrat members, Jonathan Adelstein and
Michael Copps, said they supported the plan, while
Republican commissioners Deborah Tate and Robert McDowell
said they had not come to a final decision; although
McDowell said he was more inclined to oppose the plan.
In the House subcommittee, support for Martin's plan fell
along party lines, with most Democrats voicing praise for
the plan while Republicans felt no conditions should be
applied to the auction lest the panel risk reducing the
value of the airwaves and a smaller take for taxpayers from
the auction. Estimates put revenues from the auction at as
much as US$15 billion, of which the government has marked
$10 billion for federal coffers.
A majority of commissioners must sign off on the plan,
otherwise it could be stricken from the FCC's agenda.
The challenge for the FCC, Neil Strother, an analyst at
JupiterResearch told TechNewsWorld, is how to balance
consumer needs and the capitalistic needs of businesses that
want to make a fair profit.
"They have a really hard balancing act to not undercut the
existing wireless industry," he said.
"It looks like open access is going to be put forth [in the
auction]," Strother said. "It looks like [Martin] has the
three he needs."
However, he added, January is a long time away, and things
could change before the auction next year.
A Simple Plan?
Martin's one-third plan is far short of demands made by
Google (Nasdaq: GOOG) last week. The search giant is pushing
the FCC to adopt auction rules that would require four types
of open platforms, including open applications, open
devices, open services and open networks as a condition of
Google said it is willing to bid US$4.6 billion or more in
the auction, but only if the FCC meets its conditions.
"Google has made a very public announcement," Strother
noted. "It is hard to read all the tea leaves with Google
because it could be they're saying 'we'll do it if and
only.' If they're adamant that it has to be their way, then
I'm not sure what they will do."
AT&T (NYSE: T) , on the other hand, announced its support
for Martin's plan last Thursday, in contrast to its previous
statements in which the company had stridently opposed any
open access requirements.
While the FCC rounds up support for the Martin plan and
ponders the impact of open access mandates, one of the
things David Chamberlain, a principal analyst at In-Stat,
wondered was whether the agency has the "stomach for
requiring the type of service" that an open access network
should offer. The FCC, he noted, usually looks to market
forces to determine the specifics. Doing so in this instance
could mean the effort is dead before it gets off the ground.
"GSM (Global System for Mobile Communication)? CDMA (Code
Division Multiple Access)? 3G? WiMax? For the past dozen
years, the Commission has had a track record of 'letting the
market decide' which has led to some notable failures --
such as AM Stereo and the lengthy delays in high-definition
television," he told TechNewsWorld.
"If you don't start there, then there may as well not be
anything called 'open access' at all," he concluded.