FCC chief backs some open access in airwave auction
WASHINGTON (Reuters) - The head of the Federal Communications Commission wants to require the winning bidder in an upcoming auction of valuable wireless airwaves to make them accessible to consumers using any device or software application, an FCC source said on Tuesday.
FCC Chairman Kevin Martin will propose that the open-platform requirement be part of the rules for a portion of the airwaves to be sold in the agency's auction of the 700 megahertz band, the source said.
Google Inc. (GOOG.O), which has been studying whether to take part in the auction, supports the open-platform approach and called it a "favorable development" in a notice posted on the company's public policy blog.
But Martin's proposal will not include another provision sought by Google and some consumer advocates that would require the winning bidder to resell wireless services on their network to rivals on a wholesale basis, which they say would spur competition.
Martin is expected to circulate his proposal among the agency's other four commissioners sometime this week, the source said. The outlines of his proposal were first reported in Tuesday's edition of USA Today.
FCC officials are expected to hold the auction later this year and are in the process of setting rules for it.
The airwaves to be sold in the 700-megahertz band are considered valuable because they can travel long distances and penetrate thick walls. The auction is seen as the last opportunity for a new player to enter the wireless market.
The 700-megahertz airwaves are being returned by broadcasters as they move from analog to digital signals early in 2009.
The rules will be crucial for the five or six biggest players, including Verizon Communications Inc. (VZ.N) and AT&T Inc. (T.N), which want to bolster their networks, as well as for dozens of regional and local players.
Currently, wireless carriers restrict the models of cell phones that can be used on their networks and the software that can be downloaded onto them, such as ring tones, music or Web browser software.
Verizon opposes an open-platform requirement, arguing it would diminish the value of the spectrum and would be a form of Internet regulation.
The reports outlining Martin's proposal were met with criticism from the CTIA, the main trade group representing wireless U.S. carriers. It said open-platform requirements are unnecessary and would improperly benefit Google.
"Crafting special rules for a company with a market (valuation) of $170 billion to address problems that don't exist in our competitive market makes absolutely no sense whatsoever," Steve Largent, CTIA president, said in a statement.
Meanwhile, consumer group Public Knowledge complained that Martin's proposal did not go far enough because it would not require the winning bidder to resell some of the airwaves.
Reports of Martin's proposal indicate that the FCC "is on the verge of passing up the chance to create a semblance of real competition in the wireless area," the group said.
Similar reservations were expressed by another potential bidder, a start-up company called Frontline Wireless that has proposed building a national network shared with commercial and public safety users.
Frontline has also proposed an open-access provision that would require the winner to resell airwaves to potential competitors.
"Half a loaf is no loaf," said Frontline spokeswoman Mary Greczyn.
(Editing by Phil Berlowitz, Deborah Cohen and Jeffrey Benkoe)
