Rules set for FCC airwaves auction

Times Staff Writer

Federal regulators sought to alter the nation's wireless future Tuesday, taking steps to improve public safety response during emergencies and to spur new competition for high-speed Internet access.

They also tried to resolve a long-standing annoyance for cellphone users -- having to buy new phones whenever they switch wireless carriers.

The key to those issues is a swath of prime public airwaves that the Federal Communications Commission must auction by January.

The spectrum, which TV stations will abandon when they switch to digital-only signals in early 2009, is considered "beachfront property" in the wireless world because it can easily carry data over long distances and through walls.

After months of intense lobbying by wireless providers, public interest groups and technology companies, the FCC on Tuesday set the rules for the sale of what is expected to be the last major chunk of spectrum available for years.

In its most controversial move, the FCC voted to require the winner of about a third of the spectrum to allow people to use any phone they want. The winner also must allow customers to download any mobile software applications.

The requirements, a compromise between competing plans by Google Inc. and telecommunications giants, would be a major change for wireless companies. Today they control access to their spectrum and usually limit customers to certain phones and approved software.

"Currently, American consumers are too often asked to throw away their old phones and buy new ones if they want to switch cellphone carriers," said FCC Chairman Kevin J. Martin, who crafted the compromise.

Support on the commission was not unanimous. Republican Robert S. McDowell dissented on the open access provision.

After initially opposing such a plan, the nation's two largest wireless providers, AT&T; Inc. and Verizon Communications Inc., said they could live with it.

McDowell, blasted the plan as "unnecessary regulation."

Google and public interest groups also criticized the plan, saying it didn't go far enough. They had pressed for more openness, including a requirement that winning bidders sell access to companies at wholesale prices so they could offer their own wireless services.

The commission's two Democrats, Michael J. Copps and Jonathan S. Adelstein, supported the broader plan to spur the development of high-speed Internet providers to compete with phone and cable companies and drive down prices.

But Martin, a Republican, opposed the broader open access rules, even after Google promised to provide the minimum $4.6-billion bid for the spectrum if its plan was accepted. The Mountain View, Calif., Internet company had offered to pay at least that much to allay fears that the restrictions on the spectrum would drive down its value.

The FCC on Tuesday conditioned its rules on minimum bids, most of which are still being determined, for blocks of the spectrum. If not met, the airwaves would be auctioned again without the access rules.

Analysts believe the compromise makes it unlikely that Google will bid.

Richard Whitt, the company's telecom and media counsel in Washington, said after the vote that Google would decide based on its evaluation of the FCC's detailed auction rules. AT&T; also said it would study the rules before deciding whether to bid.

While praising Martin for agreeing to some open access proposals, Whitt and public interest group representatives said the public lost out because the FCC didn't accept the broader proposal.

"Sure, it's great that we're going to take our handsets from one network to another, but that's small potatoes," said Ben Scott, Washington policy director for Free Press, a digital rights advocacy group. "History will record this moment as an opportunity lost."

Chris Murray, senior counsel for Consumers Union, noted that the rules about using any phone or software application apply only to the new spectrum -- they change nothing for the 250 million wireless subscribers today.

The big slice of public airwaves is expected to bring at least $10 billion into the federal Treasury. Of that money, $1 billion will be distributed to police and fire departments to improve their ability to communicate with one another during disasters and emergencies, a major problem during the Sept. 11, 2001, terrorist attacks.

A chunk of the new airwaves already has been set aside for a national public safety communications network.

On Tuesday, the FCC committed to auctioning off another slice of spectrum with the condition that the winner build a joint public/private network with priority given to police and firefighters during emergencies.

"Our nation's first responders have struggled for too long without finding the capital necessary to build out a broadband network with the configuration and the features they so desperately need and deserve," Copps said. "If it works -- and it's a big if -- the American people will be appreciably safer."

The International Fire Chiefs Assn. praised the FCC for allowing the public-private partnership, calling it "an important milestone for the public safety community."

Among the companies that may bid to provide the service is Frontline Wireless, a group formed by Silicon Valley entrepreneurs and former FCC Chairman Reed Hundt.


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