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Verizon Wireless Doesn't Want To Play By The Rules

Not only has Verizon Wireless been lobbying the FCC to change the open access rules agreed to for the upcoming 700 MHz auction, but it actually sued the FCC in the U.S. Court of Appeals and called the rules unconstitutional. This week, FCC Chairman Kevin Martin showed signs of folding. Is open access going out the window?

That's what it is beginning to look like. Verizon Wireless has set its well-oiled lobbying machine into high gear. Verizon executives sat down with the FCC on Sept. 17 and laid it all on the line: It doesn't want open access to be a part of the auction. By all accounts, Verizon is set to bid in this auction and doesn't want to be told what to do with the spectrum it wins. The open access provision states that winners of certain spectrum licenses have to reserve a part of the network where any device and any application can access the network, so long as the network is not harmed. Verizon doesn't want to cede control.

But Verizon isn't alone. AT&T and Frontline also both petitioned the FCC to change the rules, each for reasons of their own.

AT&T is all bent out of shape about the nationwide public safety broadband network issue. I guess they don't want to have to build one. This flip-flop on AT&T's position comes after AT&T publicly supported the rules.

Frontline is fighting more of a David and Goliath battle. It was hoping the FCC would include a provision in the rules requiring spectrum license winners to resell the spectrum at wholesale value. Since that's not the case, Frontline feels the auction is now tipped in the favor or larger companies that can afford higher bidding limits.

What does all this add up to? Well, FCC Chairman Martin is acting post-haste to change the rules. Even though there is no immediate need to alter them (in fact, the public comment period just began), Martin is running around trying to pull together a "declaratory ruling" -- some little-used political device -- to get the rules changed so as to not put out the companies willing to spend up to $15 billion to buy the licenses.

You gotta love capitalism at work.

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