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8/1/2007
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FCC Airwave Auction Rules Praised For Supporting Openness

However, the commission faces criticism from business and consumer groups for neglecting wholesale licensing and other broadband access issues.

The Federal Communications Commission's decision allowing U.S. consumers to connect to airways in the 700 MHz band using any device or software is a welcomed change, but the commission is facing criticism for ignoring larger broadband issues.

Within a few hours of the FCC's announcement on Tuesday, industry associations, advocacy groups, service providers, and technology vendors, among others, began praising the commission for supporting "openness" of the wireless Internet.

The FCC revised rules for auctioning off the 700 MHz band in order to "promote the creation of a nationwide interoperable broadband network for public safety and to facilitate the availability of new and innovative wireless broadband services for consumers," the commission said. The rules for the upcoming auction, to take place no later than January 28 of next year, include a requirement that the winner allow any device or software to be connected to their airwaves.

The FCC also established a framework for a 700 MHz Public Safety/Private Partnership between the licensee for one of the commercial spectrum blocks and the licensee for the public safety spectrum. The partnership will require the commercial licensee to build out a nationwide broadband network that would be interoperable and used for public safety.

But the FCC didn't deliver good news to potential bidder Google and coalitions that have been lobbying for a provision that would require the auction winner to resell access to its network on a wholesale basis. The wholesale licensing requirement wasn't approved.

Ben Scott, policy director at consumer advocacy organization Free Press, called the FCC's decision "a small step forward for consumer choice in mobile phones, but a large step back for genuine broadband competition that could bring the benefits of the Internet to all Americans." Without a model where third parties can use wireless services from a 700-MHz licensee at wholesale prices, opportunities for broadband competition are lost, Scott said.

In a response to FCC's new rules, CTIA, an international association for the wireless telecom industry, said it's pleased that the commission didn't restrict the number of auction entrants or demand wholesale licensing of the spectrum. But the CTIA is unhappy that the FCC deviated from its flexible-use policies, arguing that open-access rules will affect competition.

"We are disappointed that a significant portion of this valuable spectrum will be encumbered with mandates that could significantly reduce the number of interested bidders," said Steve Largent, CTIA's president and CEO.

Frontline Wireless, a startup headed by a trio of veteran telecom executives, commended the FCC's partnership framework to create an interoperable public safety network. The U.S. needs such a network for first responders to be able to communicate during national emergencies.

Unlike the CTIA, however, Frontline Wireless feels strongly about open access and wholesale licensing of the spectrum. The startup said it will consider petitioning the FCC to reconsider its decision. It also plans to participate in the upcoming 700 MHz auction.

Both eBay and Skype released statements saying that they're pleased with the FCC promoting open access to the wireless Internet. In February, Skype filed a petition with the FCC to allow consumers the attachment of any device to wireless networks. In its petition, the voice over IP provider argued that "openness" would promote innovation.

For cell phone makers, the innovation includes everything from simple rugged phones to fully featured mobile devices that deliver e-mail, music, video, GPS navigation, and television, said Nokia, which shares similar views with eBay and Skype. Nokia is one of the more rebellious cell phone makers, known for selling unlocked devices in its U.S. flagship stores. Most other cell phone makers sell devices through wireless carriers. The FCC's new rules are expected to change all that.

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