Summary:

Has the FCC gotten into the wireless business? Instead of simply auctioning off airwaves, it’s been taking it a step further recently by lay…

Has the FCC gotten into the wireless business? Instead of simply auctioning off airwaves, it’s been taking it a step further recently by laying out the business model and establishing penalties for companies that don’t stick to the plan. Perhaps encouraged by the last auction, in which it got Verizon Wireless (NYSE: VZ) to pay billions for spectrum under the conditions that it must provide open access to devices and applications, the FCC is working on two more proposals. One would be re-auctioning the D-Block, which failed to sell in the last auction, and requires the buyer to set aside a portion of the spectrum for public safety. The FCC is also considering selling a swath of airwaves that would require the buyer to provide a free nationwide wireless broadband network, according to the WSJ.

Here’s an update on the two issues:

On the D-Block: The FCC is currently taking public comments on the D-Block, and has already received several suggestions, reports RCR. So far, most of the comments focus on how the D-Block rules should be restructured to attract bidders capable of winning and operating a national wireless broadband network for first responders. In the last auction, no bidder was able to meet the reserve price of $1.3 billion. The New York Police Department weighed in, suggesting that the spectrum be broken up into regional blocks, so it could sell more easily, while another person suggested that it be given away to small businesses to develop new technologies on. Comments are due June 20.

On the Free-Internet Plan: The FCC is considering a plan that would require the winner of an upcoming auction to offer free wireless-Internet access to most Americans within the next few years, WSJ reports. Details are still unknown, but the plan mirrors a proposal by M2Z Networks, a Silicon Valley start-up last year. The problem is that most of the major carriers have already stocked up on spectrum recently, and that start-ups may have difficulty raising enough money to not only win the auction, but then to build out a nationwide network. FCC Chairman Kevin Martin has already released some details on the plan: the buyer would have to set aside a portion of the network for free access, and would be required to build out its network to 50 percent of the U.S. population within four years and 95 percent in 10 years. Internet traffic would be free, but restricted to prevent pornographic or obscene material.

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