The FCC and mobile WiMAX hopeful M2Z Networks both responded today to charges of unfair play regarding an upcoming vote on the use of AWS-3 spectrum.
The controversy centers on money. M2Z hopes to build a national network with a free public-access option, as required in the FCC’s proposed rules for an auction of AWS-3 spectrum. Some experts predict that spectrum will sell for around $50 million. However, incumbent wireless companies such as AT&T and T-Mobile USA say the auction will undercut the multiple billions they already spent on nearby AWS-1 spectrum and that M2Z’s stated intention of using FDD technology will cause significant interference to current TDD networks.
With the FCC’s vote on the proposed auction scheduled for next Thursday, public debate is heating up. The FCC already issued a technical report debunking the interference claim and T-Mobile previously said it is considering filing a lawsuit. Yesterday, Commerce Sec. Carlos Gutierrez and the Wall Street Journal both weighed in.
Sec. Gutierrez, on behalf of the Bush administration, echoed the incumbent carriers’ views in a letter yesterday to FCC Chairman Kevin Martin.
“As you know, in March 2004 President George W. Bush set a goal of universal and affordable broadband access,” he wrote. Regarding the proposed auction, he said, “This mandate would likely lead to congested and inefficiently used broadband, and it would be inconsistent with the Administration’s view that spectrum should be allocated by markets rather than governments.”
In response, “We are reviewing the letter and it appears to be very similar to what the National Telecommunications and Information Administration had put forward recently,” FCC spokesman Robert Kenny said. “We agree that free market forces should drive competition, but we also believe that providing consumers with free basic broadband is a good thing.”
“Auctions are not just about raising money, they are about setting policies that support increased benefits for consumers and ensure the most efficient use of the spectrum.”
M2Z CEO John Muleta, a former FCC official, gave a more caustic response. “The Bush Administration is marked by years of failed policy initiatives that benefit corporate interest, and this is just another example. Given the current economic crisis, the need for affordable and widely available broadband to stimulate the economy and bridge the digital divide could not be greater,” he said. “…America’s consumers have waited long enough and Chairman Martin deserves credit for pushing this innovative plan that will provide more access, create jobs and stimulate the economy. The Administration should support this plan, not fight it.”
Muleta also noted that the incoming administration of President-Elect Barack Obama has also expressed support for public broadband access.
Meanwhile, the Journal in an editorial yesterday noted that M2Z investor John Doerr, of Kleiner Perkins Caufield & Byers, raised money in the recent election season for House Speaker Nancy Pelosi and Rep. Anna Eshoo, both Democrats, representing San Francisco and Silicon Valley. “Ms. Eshoo’s district is home to Kleiner Perkins, and she has introduced legislation that would require the spectrum to go to a company with a business plan exactly like M2Z’s,” the newspaper said.
Chairman Martin has questionably helped Doerr in the past, the newspaper said. Martin was also the focus of a scolding Congressional report this week.
To that, M2Z’s Muleta responded separately. The FCC arrived independently at its auction rules and Doerr has the same rights as any other citizen to participate in the political process, he said.