Verizon Wireless Challenges Spectrum Auction Rules

The nation's second largest wireless carrier wants open access requirements favored by Google to be set aside.

Verizon Wireless is legally challenging the Federal Communications Commissions rules for Januarys 700MHz spectrum auction mandating an open network accessible to all legal devices and software.

In a Sept. 10 filing with the U.S. Court of Appeals for the District of Columbia, the nations second largest wireless carrier calls the rules "arbitrary, capricious and…contrary to law."

Verizon Wireless and other carriers lobbied the FCC for months to make the spectrum available on a high bid basis, but the agency ruled on July 31 that the prime airwaves being vacated by broadcasters as part of the digital television transition would be reserved for open access.

The idea closely mirrors the auction suggestions of Google and others. While Google has not formally announced it would bid on the spectrum, it has pledged to the FCC it would meet the $4.6 billion bid minimum if open access requirements were attached to the auction.

Verizon Wireless and AT&T, in particular, contend that open access rules would favor one business model over another. Incumbent wireless carriers currently restrict the types of devices and software that can run on their networks. The rules also run contrary to the FCCs policy over the last decade of awarding spectrum to the highest bidder.

"Verizon Wireless respectfully requests that this court hold unlawful, vacate and set aside the [auction rules] and provide such additional relief as may be appropriate," Verizon Wireless wrote in its appeal.


Click here to read more about the FCCs vote on the 700MHz spectrum auction rules.

Google quickly responded to the Verizon Wireless court challenge on its public policy blog.

"The nations spectrum airwaves are not the birthright of any one company," Chris Sacca, Googles Head of Special Initiatives, wrote in the blog. "Its regrettable that Verizon has decided to use the court system to try to prevent consumers from having any choice of innovative services. Once again, it is American consumers who lose from these tactics."

The auction is expected to generate $15 billion to $20 billion for the government. The spectrum is considered ideal for delivering advance wireless services since the signals can travel great distances and penetrate walls and other barriers to reception.

"This auction provides an opportunity to have a significant impact on the next phase of wireless broadband innovation," FCC Chairman Kevin Martin said when the agency issued its auction rules. "A network that is more open to devices and applications can help foster innovation on the edges of the network."

Martin added: "As important, it will give consumers greater freedom to use the wireless devices and applications of their choice when they purchase service from the new network owner."


To read more about Googles potential plans for the spectrum auction, click here.

The incumbent wireless limited access network rules were recently highlighted with Apples much-touted iPhone release. The phone is only available through a two-year service plan from AT&T.

Steve Largent, president and CEO of the incumbent wireless carrier trade group CTIA, blasted Martins open access plan when it was announced.

"Crafting special rules for a company with a market cap of $170 billion to address problems that dont exist in our competitive market makes absolutely no sense whatsoever," Largent said.

The FCC does not comment on active litigation filed against the agency.


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