The FCC's plan to offer free nationwide broadband has taken a step forward as the agency said the potential interference with wireless carriers' networks is minimal.

The commission had considered auctioning off the frequencies in the 2,155-2,175 MHz band and requiring the winner to offer free Wi-Fi across the United States. Wireless carriers had been opposed to this initiative because of potential interference.

In particular, T-Mobile was concerned that the Wi-Fi would interfere with the Advanced Wireless Services-1 spectrum it recently purchased for more than $4 billion. The FCC conducted interference tests in early September near Seattle, and its Office of Engineering and Technology released a report Friday showing these concerns were overblown.

"The analysis shows that an AWS-1 and AWS-3 device operating in close proximity does not necessarily result in interference. And when factoring in actual operation under non-static conditions, the situation only improves," the report said.

The report is seemingly good news for startup M2Z Networks, which has been the major proponent of the free Wi-Fi. The company has said that the carriers are opposed only because they don't want new competitors.

But interference isn't the only issue the carriers have brought up, as the mobile operators have also said an ad-supported free Internet business model is doomed to fail.

T-Mobile said it wants the FCC to reopen the issue for further public comment before moving ahead. The FCC could finalize rules by the end of 2008 and begin auctioning off spectrum in mid-2009. The company that wins the spectrum would have to ensure that the network filters out obscene content, and it would have to cover 95% of the U.S. population in 10 years.