Dismissing the complaints of incumbent wireless carriers, Federal Communications Commission Chairman Kevin Martin told Congress June 10 he plans to move forward with plans for a new spectrum auction that will require the winner to offer a free tier of broadband service. Martin said he hoped to have the issue on the FCC’s July agenda.
Martin originally proposed the idea in May and planned to have the item on the agenda’s June 12 open meeting agenda but failed to win the support of his fellow commissioners. The idea also raised the ire of the CTIA, the principal trade group of wireless carriers.
Testifying before the House Subcommittee on Telecommunications and the Internet, Martin said the proposed auction would bring a “significant public-interest benefit.”
Under Martin’s plan, the airwaves to be auctioned would include 25MHz in the 2,155-2,180MHz advanced wireless services band. The winning bidder would be required to offer free broadband service to 50 percent of the United States within four years and to 95 percent of the country within 10 years.
The proposed network would support itself by advertising and offering faster speeds on pay tiers. The plan is similar to a proposal by M2Z Networks, but the Silicon Valley startup wanted the FCC to give it the spectrum in return for 5 percent of the gross profits.
In a June 5 filing with the FCC, the CTIA said, “Prior FCC efforts to craft an auction around a single business plan have failed-and we expect this will be no exception.”
The CTIA pointed to the recent 700MHz auction as an example of the FCC pushing a business model on the market. Based on a public/private proposal by Frontline Wireless, the FCC failed to receive the minimum bid level for the D block of spectrum dedicated to public safety.
At the hearing, Rep. Cliff Stearns, R-Fla., took up the carriers’ cause, noting, “You are once again considering conditions largely tailored to one business model. We don’t think this is necessarily appropriate. It sets up winners and losers.”
Martin, though, countered that the wireless carriers are opposed to the idea because they want the spectrum for mobile video services. “The traditional industry players are actually wanting them to condition the spectrum conducive to their business model,” Martin said.
Rep. Anna Eshoo, D-Calif., defended Martin’s plan, calling the proposed conditioned auction an opportunity to bring more competition to the wireless Internet market. Last month, Eshoo and Rep. Chris Cannon, R-Utah, introduced legislation that would require the FCC to auction fallow spectrum (such as the 2,155-2,180MHz band) to provide free broadband for 95 percent of the country within 10 years.