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12/15/2008
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Free Internet In Limbo As FCC Chairman Cancels Vote

The proposal would have helped established a nationwide license in the 2,155-MHz to 2,180-MHz band, of which 25% would have been set aside for free Internet access.

Under pressure seemingly from all sides, FCC Chairman Kevin Martin canceled a vote that would have allowed free Internet service to be delivered over the AWS-3 spectrum.

Martin backed down after the White House and Democratic congressional leaders joined Internet service providers in criticizing Martin's plan to use the spectrum. Sen. Jay Rockefeller, D-W.Va., and Rep. Henry Waxman, D-Calif., sent a letter last week urging the FCC to drop the issue.

"We received the letter from Senator Rockefeller and Congressman Waxman today and spoke with other offices," said Robert Kenny, an FCC spokesman, in a statement Friday. "In light of the letter, it does not appear there is consensus to move forward and the agenda meeting has been canceled."

Martin had endorsed the creation of a nationwide license in the 2,155-MHz to 2,180-MHz band that called for the winning bidder to earmark 25% of the band for free Internet access. M2Z Networks, a heavily funded startup, was prepared to filter the network to keep pornography and other inappropriate content off the network.

ISPs never blessed the idea of free Internet service, and their charge was led by T-Mobile, which maintained that the free service could interfere with its AWS spectrum, which it has been deploying in recent months. T-Mobile spent more than $4 billion for the AWS spectrum in an FCC auction and said the M2Z proposal needed additional testing. The FCC had said that initial testing indicated the proposed free swathe of spectrum wouldn't cause interference.

Martin is something of a lame-duck FCC chairman anyway as President-elect Barack Obama is expected to choose a new chairman after he takes office in January. Rockefeller and Waxman urged Martin to skip the free Internet proposal and instead concentrate on February's switchover to digital television signals. Rockefeller and Waxman will chair the respective Senate and congressional committees that oversee the FCC.

"At a time when serious questions are being raised about transition readiness, it would be counterproductive for the FCC to consider unrelated items, especially complex and controversial issues," Rockefeller and Waxman wrote in their letter to Martin.

Last week, Rep. John Dingell, D-Mich., fired a shot across Martin's bow in a 110-page report titled "Deception And Distrust: The Federal Communication Commission Under Chairman Kevin J. Martin." Although the report didn't specifically take Martin to task over the AWS spectrum issue, it served to intensify the pressure on the chairman before the FCC vote on AWS.

Pressure began building last week when Commerce Secretary Carlos Gutierrez wrote to Martin, disapproving of the free Internet plan. "The history of FCC spectrum auctions has shown that the potential for problems increases in instances where licensing is overly prescriptive or designed around unproven business models," Gutierrez wrote.

M2Z Networks is proposing that a 25-MHz spectrum chunk be set aside for free Internet use, and the plan could still be voted on next year. M2Z was co-founded by John Muleta, former head of the FCC's Wireless Telecommunications Bureau. The company has attracted significant venture capital investment.

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