July 24, 2007 / 9:49 PM / 12 years ago

UPDATE 1-Open-access has support in FCC wireless auction

(Adds details about alternative open-access proposal backed by Google)

By Peter Kaplan

WASHINGTON, July 24 (Reuters) - A majority of the Federal Communications Commission expressed support on Tuesday for a plan to impose open-access requirements on some of the valuable wireless airwaves due to be auctioned by the government later this year.

Three of the five FCC commissioners told lawmakers at a congressional hearing they were in favor of a proposal that requires whomever wins the bidding for part of the airwaves to make them accessible to any device or software application.

“A network more open to devices and applications can help ensure that the fruits of innovation on the edges of the network swiftly pass into the hands of consumers,” FCC chairman Kevin Martin told a House Energy and Commerce subcommittee.

Martin, a Republican, proposed the open-access regime earlier this month. At Tuesday’s hearing, he expressed reservations about an even broader open-access proposal being promoted by some consumer advocates and potential bidder Google Inc (GOOG.O) that would force the winning bidder to resell access to their network on a wholesale basis.

During Tuesday’s hearing, the two Democrats on the FCC said they supported the modest access provisions proposed by Martin, though it was unclear whether they were pushing for the more aggressive plan backed by Google.

An open-access approach “could open these key airwaves to badly needed competition in the broadband space,” Democratic commissioner Jonathan Adelstein said in a prepared statement at the hearing.

Republican commissioners Deborah Taylor Tate and Robert McDowell said they had not yet decided whether to support the open-access requirement, although McDowell said he was leaning toward opposing it.

The open-access approach proposed by Martin has been supported by leading U.S. wireless provider AT&T Inc (T.N), but opposed by No. 2 Verizon Communications (VZ.N).

The airwaves to be sold in the 700-megahertz band can travel long distances and penetrate thick walls. The auction, to be held later this year, is seen as a last opportunity for a new player to enter the wireless market.

The 700-mHZ airwaves are being returned by broadcasters as they move from analog to digital signals early in 2009.

Currently, wireless carriers restrict the models of cell phones that can be used on their networks. They also limit the software that can be downloaded onto them, such as ring tones, music or Web browser software.

Martin’s plan was praised by most of the Democrats on the panel, but was questioned by Republicans, who said the auction should be conducted without conditions.

“The free market works best. And successful auctions work best without encumbrances,” Michigan Republican Rep. Fred Upton said.

Upton and other critics of Martin’s auction plan said the conditions proposed by Martin would reduce the value of the airwaves and bring in less money for taxpayers.

Martin said he had tried to address those concerns by including a provision in the auction plan that would set a minimum bid of $4.6 billion for the open-access portion of the airwaves. If no bidders met the minimum amount, the auction would be rerun without the open-access conditions.

Martin also sought to dispel criticism that his open-access conditions would amount to a subsidy of Google’s bid.

“The conditions I’ve (proposed) aren’t designed to help any particular bidder,” Martin said. (Reporting by Peter Kaplan)

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