05.30.2006 01:51 PM
Company seeks spectrum for free Internet service

A Silicon Valley company, backed by several prominent venture capitalists, has asked the federal government to give it spectrum for a free high-speed national Internet network.

The proposal, reported by the New York Times, said the network is based on the concept of network television and would be supported by local and national advertising.

The company, M2Z Networks, is making a case to the FCC that its plan could hasten the spread of broadband Internet use and lead to lower prices by spurring competition with the cable and telephone giants that dominate the Internet market, the Times reported.

M2Z told the FCC that it would need 20MHz of spectrum to send and receive wireless signals at a proposed speed of 384 kilobits a second.

Bruce Sachs, a partner with the venture capital firm Charles River Ventures, is one of the backers of M2Z. He told the Times that the company expected to spend $1 billion over about 10 years on infrastructure that would cover 95 percent of the country.

Investors, he said, have already committed $400 million for the construction, money that would come due only if the FCC agreed to give away the spectrum.

The company proposes to offer a premium service, at speeds of around 3Mb/s for $30 a month or less. M2Z has offered to give the government five percent of the revenue from this service.

The proposal comes as several towns and cities, including San Francisco and Philadelphia, are working with companies to build local Wi-Fi networks to provide free or subsidized Internet access.

Chelsea Fallon, a spokeswoman for the FCC, said the commission did not have a time frame for when it might address the issue.

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