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FCC Chairmen battle on the wireless Frontline

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If nothing else, FCC chairman Kevin Martin is a master of the media spin move. With Tuesday’s well-executed leak of his plan for the 700 MHz auction rules (to USA Today and the Wall Street Journal), Martin won headlines for championing “open” networks — even as he kicked the open-networking ideas of Frontline Wireless to the curb.

Though Martin’s draft version of the 700 MHz rules haven’t yet been officially revealed, Frontline co-founder Reed Hundt has seen and heard enough of what Martin proposes, to call it a “dreadful plan” that favors incumbent telcos over new entrants, while paying lip service to the word “open.”

“What the chairman has presented is a Trojan Horse, filled not with Greeks but with Verizon lobbyists,” Hundt said in a phone conversation Tuesday morning. “What America needs is a new national network that really works. If you let Verizon buy it [the spectrum] and put it in the bottom left drawer, you’ve done nothing.”
As we mentioned before, Martin has made noises lately in praise of the idea of more-open networks; according to the stories Tuesday, Martin’s draft rules may incorporate some requirements for bidders in the auctions to keep the new wireless networks open to any devices.

Theoretically, such requirements could benefit players like Google and eBay’s Skype, who have been pushing for such rules to apply to all wireless networks. Frontline, for one, has been extremely vocal about how locking devices to a single service (like the iPhone) can hamper innovation and performance. But as often the case with telecom law, the devil is in the details, and in Martin’s plan Hundt sees horns.

“You can’t just say ‘Carterphone’ and ‘no locking of devices’ and claim you have an open network,” said Hundt, who didn’t have time to get into specifics. However, it was clear to Hundt that Martin’s definition of “open” contains enough loopholes to keep the incumbent telcos happy, which means a tougher road for new entrants. “Unless you have no blocking, no locking and no competing retail services, it’s not open,” Hundt said.

In a wait-and-see blog post Tuesday, Google reiterated its support for open networks, but a spokesman for the company said it couldn’t comment further on Martin’s draft since they haven’t yet seen it. And while the WSJ article claimed that Martin’s plan was the end of the line for Frontline, the upstart organization was busy scrambling Tuesday to change parts of its original plan to make it more digestable.

Though he has considerable sway, Martin is only one of five commissioners who must approve the rules, and there is no assurance that fellow GOP commissioner Robert McDowell will follow Martin’s lead blindly. So the game may not be over, but it sure looks like Frontline may be down to its last batter.

“Those who believe in America should hope that [Martin’s proposed draft] is not what the FCC adopts,” said Hundt.
(We are awaiting a reply from Verizon, and will update if and when we receive it. We did hear back from Verizon reps, who “respectfully decline to comment.”)

12 Responses to “FCC Chairmen battle on the wireless Frontline”

  1. The Coalition to Keep America Connected today sent to Congress and the Federal Communications Commission (FCC) a petition signed by more than 800 telecommunications providers in 47 states urging adoption of the recommendation by federal and state experts to place a temporary cap on payments from the
    Universal Service Fund (USF) program to competitive eligible telecommunications carriers (CETCs).

  2. the real openness starts with customers NOT locked with plans (read – undisputable contracts, effectively stopping them to change operator) AND two-better-three operators on each popular square foot of wireless coverage – come to Finland, see how it beats price down to minimal margin on top of costs.

  3. Jesse Kopelman

    Richard, the short answer is that this would produce less up-front money. Anyway, the current process is actually a sort of perpetual lease and the government can break it. One of the reasons they seldom do is it would devalue future auctions (why pay big bucks if there is worry that the government may stiff you), or instead of just repossessing the spectrum they give different spectrum back in trade (e.g. the 800MHz SMR relocation to 1900MHz).

  4. Richard Mueller

    Why doesn’t government lease spectrum instead of selling it? After all, it belongs to all of us. That would allow flexibility in the future.

  5. Jacomo

    The only real hope for an open network in the upper 700Mhz spectrum (only viable two way space) is for Google to team up with someone esle and use their deep pockets to beat Verizon Wireless at their game. Not much chance but still a glimmer.


  6. Tom Coseven

    Martin split the baby, which is what most people suspected he would do for the last month. It’s hard to believe that Frontline doesn’t already have a counter-proposal drafted that matches these exact conditions.

    Not many people actually believed it was possible to win on the bid credits, open roaming or wholesale requirements. However, losing the 12/10MHz public/private combination and not having the scaled back open access provisions applied to the adjacent spectrum was not predictable, as well as a much more serious blow.

    Frontline needs pull their act together in a hurry, and pick a battle they might be able to win. Allowing Reed Hundt to continue to distract from the core public safety message by whining about wholesale won’t help Frontline win anything.