Sirius–XM merger, FCC free wireless internet plan
Manuel Balce Ceneta/AP
FCC Chairman Kevin Martin

FCC Considers Free Wireless Internet Plan

December 04, 2008 07:31 AM
by Anne Szustek
The Federal Communications Commission is expected to unveil a proposal to sell public airwaves with the stipulation that some of the broadcasting be allotted to free Internet.

The Costs of Free Internet Access

In what is likely to be one of his last moves as head of the federal agency charged with oversight of the telecommunications industry, FCC Chair Kevin Martin is to propose at the group’s Dec. 18 meeting a plan to auction off a section of public airwaves being vacated after TVs switch to solely digital broadcasting—on the condition that one-quarter of the purchased broadcasting space is used to provide free wireless Internet access.

Additionally, the access would have an automatic filter meant to block pornography and other content unsuitable for children. (Adults would be able to unblock the feature.) Plus the highest bidder in the FCC auction could offer fee-based service for any remaining airwaves that could have faster downloading speeds.

“This initiative brings with it the promise of a free basic broadband service to hundreds of thousands of Americans who currently have limited or no access to the high-speed Internet,” Martin was quoted as saying by The Washington Post. “It is important that we find new and creative ways to make broadband services more accessible, reliable and robust throughout our nation and this initiative will help us meet that goal.”

Martin’s proposal may quell criticism that America has fallen behind some other developed countries in a push for universal Internet coverage, as well as curry favor with the two Democratic members of the FCC’s five-person governing board. Martin, a Republican, is likely to lose his leadership position on the board.

Democrats, who will gain a three-person majority under the Obama administration, have backed the individual ideas in the proposal; however “it is unclear whether the Democrats will back the proposal,” Reuters writes. The other two Republicans on the FCC board are expected to vote against Martin’s plan.

If the proposal goes through, the auction will be run under the Obama administration.

Background: Regulations on sale of public airwaves

The airwaves that would go up for sale are, as the Los Angeles Times puts it, the equivalent of “beachfront property” in the wireless communications sector, as such frequencies can transport information over long distance and penetrate walls.

Any private bidder that wins the “white space”—the spectrum being vacated following the switch to digital TV broadcasting—will run alongside frequencies used for first response by public safety groups such as fire and police departments, who would get priority airtime during emergencies.

The International Fire Chiefs Association called such a public-private partnership “an important milestone for the public safety community,” the group was quoted as saying by the Los Angeles Times.

Other groups are not so upbeat on the deal, however.

Opinion & Analysis: Tech firms in favor, wireless providers against auction

Although an auction would bring much-needed revenue to the FCC, in this sluggish economy few tech firms may be willing to put up the capital needed for infrastructure. The commission already had to lower the bench price for an auction it held for a frequency spectrum known as the D-block to $700 million after no companies stepped in when the minimum bid was $1.3 billion.

Critics of the FCC proposal include free-speech advocates, who have come out against the pornography filter included in the mandate, as well as cellular service providers who claim that the frequencies used would cause interference with their service.

Cell phone service provider T-Mobile, a subsidiary of Germany’s Deutsche Telekom, contends that the signals would disrupt service for its 3G customers. The company recently shelled out $4 billion for frequency space near the airwaves that would go up for auction. FCC engineers argue that there would be no major interference.

AT&T and Verizon, other wireless providers who have recently paid billions of dollars for airwaves, are also potential losers in a deal, writes ZDNet’s Larry Dignan.

Companies that stand to benefit from such a deal include tech titans Google, which was a major proponent of the FCC proposal, and broadband specialists Motorola and Cisco. Dignan also puts Intel on his list of “winners” from a white-space auction. “Like Wi-Fi–and now WiMax,”–the latter of which could become a “bridge technology” if national free wireless Internet access becomes a reality, Dignan argues—”Intel will make chips with technology embedded to take advantage of this spectrum.”

Related Topic: FCC approves Sirius–XM merger

Ruling that it would not constitute a monopoly, on July 25 the FCC voted 3-2 to approve the merger of satellite radio companies XM and Sirius however, with more lenient requirements than some on the board desired.

The five-person board stipulated that the combined satellite broadcaster allocate 8 percent of airtime for noncommercial programming, as well as institute a three-year price freeze.

Jonathan Adelstein, a Democratic commissioner for the FCC, said a week prior to the board’s decision that he was to give the green light to the merger if the combined network dedicated one-fourth of its airtime to public and minority broadcasting, as well as not raise prices for six years.

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