Proposed 700 MHz rules leave unanswered questions

FCC Chairman Kevin Martin meticulously leaked his draft order for the 700 MHz band to key news outlets earlier this week, garnering headlines for his proposal of an open-access regime for at least part of the band. (See Story No. 1) The proposal would allow a level of open access on two 11-megahertz blocks in the 700 MHz band. Martin wants any device and application to be able to run on these networks, but he has apparently stopped short from requiring the winning bidder to open its network up on a wholesale basis. In addition, Martin's proposal sets aside a separate national 10-megahertz block for bidding that would require the winning bidder to work with public safety on adjacent frequencies to improve first-responder communications. Naturally, the mobile-phone industry is vehemently opposed, while players such as Google and Skype have been championing an open-access model.

Push aside the arguments for and against open access, however, and there some unanswered questions that immediately come to mind:

- If Chairman Martin and the other FCC commissioners do indeed agree on an open-access scheme that requires any device and application to run on the network, will operators have any control? What about security concerns and protecting the integrity of the network? What about making sure an application runs smoothly on the network? Can operators require device certification?

- If open access is mandated, then what other stipulations will be required to make that happen? Rules on service pricing? Technology?

- Just who would be interested in bidding on the spectrum that will require open access? It's pretty clear the incumbents won't be bidding on that band. Does anyone else have the deep pockets required to construct a wireless network from scratch and actually see an open-access model as a good money-making venture? News Corp. has already cited the difficulty and expense of building out a wireless broadband network. For companies whose core business isn't the operation of wireless networks, it's a project that is difficult to justify.

- It sounds like the FCC would set aside the open access spectrum in the lower band of the 700 MHz spectrum. There is still debate on whether the lower band can even support two-way communications given the congestion.

- And finally, is the FCC forcing the inevitable? As networks support faster and faster data speeds, won't consumers come to demand such a capability? I believe Sprint Nextel could very well be the catalyst. It will be launching a nationwide WiMAX network with non-subsidized devices and an open access model. Once customers discover the "freedom" it may become a commercial pre-requisite for 700 MHz auction winners to do the same.

At any rate, the commission has some difficult issues ahead of it. And it doesn't have much time. By law, the auction must not start later than Jan 28, 2008, and proceeds from the sale need to be deposited with the U.S. Treasury no later than June 30, 2008. Auction winners can't launch service until analog TV service is shut down on Feb. 17. 2009. --Lynnette

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