06.18.2007 10:00 AM
Open networks issue infuses spectrum auction debate

While the nation’s television broadcasters prepare to abandon the analog spectrum, others see its impending auction as a defining moment in the future of electronic communications.

The FCC’s pending release of rules for the upcoming auction of the spectrum has created a swirl of lobbying on Capitol Hill. Rules are being sought to ensure broadband providers treat all Internet content the same. Several other questions dominate the debate: whether spectrum should be sold in large or small chunks; whether the FCC should force winning bidders to build their networks quickly and deploy them to underserved areas; and whether consumers should be able to hook up any device to the network.

Some consumer groups have formed the Public Interest Spectrum Coalition, which is pushing for anonymous bidding and rules to allow one company to gain a nationwide chunk of the spectrum so that it can launch a third, high-speed wireless pipeline to the Internet. The goal is to create an alternative to using phone or cable companies to obtain broadband.

The auction in the 700MHz band isn’t expected until January, but the FCC could announce rules at the end of this month. The way those rules are written could be the determining factor in the outcome of the auction, which many industry experts see as the last real opportunity for new players to enter the U.S. wireless market.

By late last week, the aggressive lobbying was getting the attention of lawmakers. Sen. Daniel Inouye, D-HI, chairman of Senate Commerce Committee, said the auction should be designed by the FCC to spur new competition in wireless services rather than just raise money for the federal government.

Inouye cited “lingering concerns” that the auction rules could allow existing wireless carriers to strengthen their grip on the business by buying up the spectrum. “It is important that the commission recognize the danger of further consolidation and adopt rules that will attract new entrants and promote competition,” said Inouye at a Senate hearing last Thursday.

Public safety communications is a centerpiece in the debate. The need for a national broadband network for emergency use became clear during the 9/11 attacks and Hurricane Katrina. Accommodating that emergency network has created several proposals.

Inouye expressed concern that proposals to auction the spectrum in big regional blocks covering large geographic areas might make it difficult for new entrants to bid against established carriers such as AT&T, Spring Nextel and Verizon Wireless.

The chairman’s comments were applauded by some consumer advocacy groups, which called for half the airwaves up for auction to be designated as “open access” spectrum. That would allow other companies to buy access on established wireless networks so they can offer their own wireless services.

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