[1st-mile-nm] F.C.C. Approves Airwave Sale Rules

[Richard Lowenberg]

F.C.C. Approves Airwave Sale Rules

By THE ASSOCIATED PRESS
Filed at 5:05 p.m. ET  July 31, 2007

<http://www.nytimes.com/aponline/washington/AP-Airwaves-Auction.html?
_r=1&hp&oref=slogin>

WASHINGTON (AP) -- The FCC approved rules Tuesday intended to give
people more choice on their cell phones and wireless devices after a
pivotal airwaves auction next year.

The vote clears the way for the auction, which is expected to raise
as much as $15 billion.

The Federal Communications Commission approved a much-debated ''open
access'' provision, pushed by Chairman Kevin Martin, a Republican,
and supported by the agency's two Democrats, that will allow
customers to use whatever phone and software they want on about one-
third of the spectrum to be auctioned.

A more ambitious provision that would have required a licensee to
sell access to its network on a wholesale basis was not included in
the rules. That makes it unlikely that Google Inc. will bid. Google
had been expected to challenge traditional wireless companies if the
rules had been favorable.

The rules also will allow for the creation of a shared public safety
network that commissioners hope will solve many of the communication
problems that firefighters and other first responders have
experienced during disasters like the Sept. 11, 2001, terrorist attacks.

The vote was not unanimous. Republican Commissioner Robert McDowell
dissented on the open access provision, his first ''no'' vote since
joining the commission. Republican Deborah Taylor Tate also expressed
concerns about the provision, but she did not oppose it.

The two Democrats, Michael Copps and Jonathan Adelstein, would have
preferred that the rules had included the wholesale concept sought by
Google and consumer groups. Still, they ended up supporting the final
rules.

The text of the rules was not released at Tuesday's meeting. The
language in the document ultimately will determine which investors
will commit billions of dollars to develop new wireless networks and
which may not bid at all.

The spectrum to be auctioned has been praised for its ability to
travel long distances and penetrate walls easily -- the same
characteristics that made it attractive to broadcasters who are
vacating it to make way for all-digital television.

The Congressional Budget Office estimates the auction's proceeds will
amount to between $10 billion and $15 billion.

A total of 62 megahertz will be auctioned under the new band plan.
Twenty-two megahertz will be subjected to the ''open access'' rules
being pushed by Martin. Another 10 megahertz will be dedicated to the
national public safety network, which will be shared between a
commercial operator and public safety agencies.

Martin said he tried to ''strike an appropriate balance'' with the
new rules, noting the criticism from his fellow commissioners.

Copps said that by failing to adopt a wholesale provision, the
commission ''misses an important opportunity to bring a robust and
badly needed third broadband pipe into American homes.''

While the Democrats thought the rules didn't go far enough, the two
Republicans on the commission felt they went too far.

McDowell was concerned the rules would impose too much control on the
wireless industry.

Last April, Martin described the auction as the last best opportunity
to introduce a ''third pipe'' competitor to the world of high-speed
Internet access, which is largely dominated by cable and telephone
companies.

Public interest groups, later joined by Internet search engine giant
Google, argued that the best way to ensure that a third-pipe
competitor would emerge was to reserve some of the spectrum for use
by a wholesaler.

Google even said it might bid if such a condition were imposed. A
wholesale requirement would have discouraged big cable and telephone
companies -- who would be unlikely to lease space on the new network
to potential competitors -- from bidding.

The spectrum will be occupied by television broadcasters until
February 2009. The winning bidder or bidders then have to ''build
out'' the network. This could take several years and billions of
dollars.