Microsoft: Loosen Spectrum Rules

Promotes unlicensed use of airwaves; supports RBOCs' deregulation effort.

Microsoft Corp. traditionally has steered clear of telecommunications regulators and legislators, but the software company is raising its profile in Washington in a bid to spur rapid deployment of more affordable high-speed networks. Microsoft views faster, cheaper pipes, particularly emerging wireless broadband networks, as a conduit for selling more applications and services.

The subject of a highly contentious and protracted debate in Washington, broadband deployment policy pits RBOCs (Regional Bell Operating Companies) against most other telecom service providers, including long-distance companies, Competitive Local Exchange Carriers and cable companies. For more than two years, RBOCs have waged a vigorous campaign to roll back regulations requiring them to lease rivals access to the "last mile" of the network at regulated rates.

Stepping into the middle of the contest, Microsoft Chief Technology Officer Craig Mundie testified last week before a panel of senators overseeing telecom policy. The only industry representative testifying among policy experts, Mundie told lawmakers that Washington should foster a wireless alternative to telephone and cable broadband offerings by making more spectrum available. However, the spectrum would not go to the large wireless carriers that typically bid for it at Federal Communications Commission auctions but instead would be available for unlicensed use by anyone.

Emerging wireless technologies, including 802.11b, or Wi-Fi; wireless LANs; ultrawide band; and software-defined radios offer the potential for deploying broadband connections directly to the consumer via small computing devices, Mundie said, urging lawmakers to prompt the FCC to allocate more spectrum for their use.

Several panelists at the hearing, including Lawrence Lessig, professor of law at Stanford University, and Michael Price, vice chairman of Evercore Partners Inc., in New York, echoed Mundies call for more unlicensed spectrum.

In the meantime, Sens. George Allen, R-Va., and Barbara Boxer, D-Calif., have been drafting a bill to accelerate the development of wireless broadband technologies. Among other things, the measure would direct the FCC to make more spectrum available for unlicensed use, establish technical rules for that spectrum and establish "baseline Internet connectivity principles." Mundie said the proposed bill is compatible with Microsofts recommendations.

Microsoft, of Redmond, Wash., also offered support for the RBOCs campaign for deregulation. RBOCs argue that they should not be subjected to last-mile leasing regulations when it comes to broadband services because their main rivals, cable companies, are not regulated as such. They maintain that the regulatory requirements hinder them from making new investments in high-speed data networks. (RBOCs have recently begun lobbying for similar deregulation for voice services as well.) Mundie told lawmakers that Microsoft sympathizes with the RBOCs argument.

Former FCC Chairman Reed Hundt, who also testified before the Senate panel last week, said the government must subsidize broadband deployment because the private sector simply will not make the necessary investment in this economy. "You need to throw money at [the problem]," Hundt said.