Auction talk "opens up" the networks

Establishing the rules of the 700 MHz auction turned out to be one of the most contentious issues of the year. Google led the fight against the CTIA, Verizon Wireless, AT&T and other incumbent wireless carriers to lobby the FCC to make it easier for new entrants to win spectrum slices and become carriers or brokers of wireless spectrum. The debate centered on the concept of "open access" networks.

After spending millions on lobbyists, neither side seemed pleased with the final rulings: The winner of a slice of spectrum in the Upper C block would be required to build out a network that did not block and handset or any application that its users desired to connect to it, so long as it did not pose any damage to the network.

Google originally wanted the FCC to implement more rules on the slice of spectrum to ensure that the winning bidder would have a truly open network. Google encapsulated its position in four keys provisions for true open access. The first two provisions, which the FCC implemented, were open applications and open devices. The other two provisions were not adopted by the FCC: Open services-third parties (resellers) should be able to acquire wireless services from a 700 MHz licensee on a wholesale basis, based on reasonably nondiscriminatory commercial terms; and the "open networks" provision: third parties (like internet service providers) should be able to interconnect at a technically feasible point in a 700 MHz licensee's wireless network for services like GPS.

Verizon Wireless and other carriers argued that the industry was already competitive enough and there was no need for special rules to help third parties enter the market. Verizon Wireless said special rules for any company or segment of the high-tech industry that tips the balance in their favor are problematic. If the rules are unavoidable, the carrier argued, the amount of spectrum allocated to this "experiment" should be minimal so that the value of the rest of the spectrum is not diminished along with it.

In a dramatic turn of events, just a few months after the FCC announced the implementation of open access rules for the auction, Verizon Wireless said it would make its entire nationwide network an open access network that would allow "any device, any apps" to connect to it, so long as they don't harm the network. It seemed like the FCC's "experiment" had a great effect on the carrier's plans. AT&T was quick to respond to all the positive press Verizon Wireless garnered for its intent to open up its network: AT&T Mobility CEO Ralph de la Vega said his company's wireless network was already the most open network in the U.S. because it ran on GSM and any GSM phone with a SIM card could be ported to the network.

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