November 23, 2009
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A Spectrum Of Opinions About Auction Rules
THE FCC
• Chairman Kevin Martin: "This auction has the potential to unleash a new era in wireless technology," he said. "The public interest is not about what any company wants. It's about serving the people." Under his proposal, bidders would have to let consumers use any device with any software on the networks, except for those on the so-called D-block, which would be designated as a public-safety network. The draft rules would not require wholesale access to the spectrum, but Martin said the rules wouldn't prevent such access, either. He also said his plan is not designed to help any particular bidder but to help consumers.

• Commissioner Jonathan Adelstein: "While this item doesn't deliver everything that consumers and innovators wanted," it is a "positive step for consumers." Nevertheless, he agreed that the lack of wholesale access is problematic. "At the end of the day, we may have missed an elusive opportunity to open that third channel into the home," he said.

• Commissioner Michael Copps: "I'm a big believer in open access. And to me that means wholesale as well as device and application freedom." He praised aspects of the rules but lamented that smaller players will have a lack of mandatory access to networks at wholesale rates. "This action might not be the stimulus" to create a "third" nationwide high-speed Internet service to compete with dominant telecom and cable providers, he complained. Copps also warned that the rules are "tilted" to companies with "competition-killing" operations.

• Commissioner Robert McDowell is pleased that the FCC rules would create a nationwide wireless network for emergency responders to communicate across jurisdictions. But he said consumers could be "short-changed" by the open-access conditions.

• Commissioner Deborah Taylor Tate backed the public-safety components but was "lukewarm" about the open-access requirements. Tate said she hopes the FCC's decision will not result in less innovation and fewer consumer options.































POTENTIAL BIDDERS
AT&T has endorsed Martin's plan as "a creative compromise that balances the interests of companies and consumers." The company has panned Google's request, claiming that it is trying to rig the bidding in Google's favor.

Cyren Call has lobbied regulators to designate part of the spectrum for a public-safety network.

Frontline Wireless wants to build a public-safety communications network that also would accommodate commercial services. Sources said Frontline has secured half of the conditions it is seeking.

Google told the FCC it must meet four conditions to guarantee that auctioned frequencies are accessible to unaffiliated applications and devices, and could be leased by other parties at wholesale rates, before it will bid.

U.S. Cellular and other rural wireless companies are pushing for frequencies to be auctioned in smaller chunks so they can be more accessible to regional players.

Verizon Communications would accept some rules designed to foster "open access" to the airwaves, so long as providers don't have to guarantee that all applications, such as games and videos, will work properly and customers are not clamoring to use affiliated devices on Verizon's infrastructure and insisted that the marketplace is responding to consumer demands.


























CONGRESS
• Congress Energy and Commerce Committee Chairman John Dingell, D-Mich., and other Democrats have suggested that Martin's plan would not go far enough.

• North Dakota Democrat Byron Dorgan urged Martin to adopt more consumer-friendly conditions.

• Rep. Mike Doyle, D-Pa.: "I think it's time for the consumer to become the decider of what their cell phones do -- not the cell-phone companies."

Greg Louer, the legislative director to Rep. Marsha Blackburn, R-Tenn.: "To essentially rig the game with open-access rules or other heavy-handed regulations will jeopardize the potential success of the auction and not likely yield additional innovation in the wireless industry."

• Massachusetts Democrat Edward Markey, chairman of the House Energy and Commerce Telecommunications and the Internet Subcommittee, commended Martin for seeking to create "a beachhead for consumer choice and innovation." But he also criticized the plan because it would only require about a third of the spectrum to be accessible to unaffiliated devices and software.

• Alaskan Ted Stevens, Senate Commerce's ranking Republican, Sen. John Sununu, R-N.H., and National Telecommunications and Information Administration Chief John Kneuer warned that the plan to impose consumer-friendly restrictions will devalue the spectrum and could reduce revenue for the U.S. treasury.

Fred Upton of Michigan, the House Energy and Commerce Telecommunications and the Internet Subcommittee's ranking Republican, called Martin's proposal a "gamble." He said, "The government shouldn't be in the business of subsidizing entry into a competitive marketplace." Upton also said burdensome restrictions like requiring "open" networks could harm consumers.
































INDUSTRY AND PUBLIC ADVOCATES
• The wireless association CTIA has panned Martin's plan as a giveaway to Google. Spokesman Joe Farren: "This is exactly as we've said: Silicon Valley welfare." Farren also spoke against Frontline's request.

Gene Kimmelman of the Consumers Union: "If [the winners of the D-block] hit the jackpot and walk off with the government's public-safety business, cell-phone carriers can continue to tightly control which devices and applications to which consumers have access."

Silicon Valley entrepreneur Jason Devitt said of current restrictions on wireless networks, "I'm mad as hell that I have to ask for permission to innovate." He said "hundreds" of technologies are not reaching consumers because wireless carriers operate proprietary networks.

Ben Scott of Free Press considers the "open access" plan a "step in the right direction."

Public Knowledge and its allies contend that the auction provides a rare opportunity to enable a viable "third" competitor to telecommunications- and cable-delivered high-speed Internet access, but the plan falls short by not requiring large, existing wireless licensees to lease wholesale capacity to smaller players.























-- Compiled by Theresa Poulson


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