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Hearings on 700MHz

A plan to have private investors build a national 700 MHz wireless broadband network for police and fire departments met resistance at a U.S. Senate hearing Thursday, reports the Washington Post. New York has already built a US$500 million emergency network that will roll out fully in early 2008.

The Frontline Wireless proposal could take away local control of emergency communications networks, said Paul Cosgrave, commissioner of the New York City Department of Information Technology and Telecommunications (pdf testimony).

But the U.S. government lacks the money to build the network, said James Barksdale, a partner in Frontline (pdf testimony). The national broadband network for emergency response agencies (like the $10B Integrated Wireless Network), will take billions of dollars to build, and a public-private partnership like the one Frontline has proposed is the only way it will happen, said Barksdale.

Frontline Wireless, backed by two former U.S. FCC chairmen and several tech industry heavyweights, would set aside 22MHz of wireless spectrum from an upcoming auction of the 700MHz band for a dual-use commercial and emergency response network. Frontline added former FCC Chairman Mark Fowler to its board of directors this week. The Frontline plan would take 10MHz from 60MHz scheduled to be auctioned by early next year and pair it with 12MHz of spectrum out of 24MHz set aside for public safety.

Senate Commerce Committee Chairman Daniel Inouye cited “lingering concerns” of the upcoming 700 MHz auction rules set by the Federal Communications Commission. Concerned that existing cellular carriers will strengthen their grip on the business by buying up the spectrum, he said; “It is important that the commission recognize the danger of further consolidation and adopt rules that will attract new entrants and promote competition.”

“We very much appreciate the comments of senators, including chairman Inouye, who recognize that according to the law, generating a large amount of money is not the goal of the auction,” a coalition of consumer groups, including Consumers Union and the Consumer Federation of America, said in a statement afterward.

Sen. John Kerry (D-Mass.) said the FCC should write 700 MHz rules that foster innovative wireless broadband services and improved first-responder communications. Kerry did not mention Frontline Wireless by name, but his press release embraces many of the themes in the startup’s campaign to create national wireless system.

Representatives of two wireless carriers told the committee they oppose open access rules in the auction. Dick Lynch, executive vice president and chief technical officer at Verizon Wireless, suggested open access and net neutrality rules called for by several groups would limit the appeal of the spectrum and reduce the money the U.S. government receives in the auction (pdf testimony).

Senator Ted (”Tubes”) Stevens, also questioned the Frontline plan, saying the best way to raise money for public safety equipment is to maximize the value of the spectrum at auction.

The Senate Commerce Committee hearing on Thursday, debated whether open access rules should be levied on whoever wins the auction. AT&T and Verizon say the market should determine how spectrum should be used.

Google says federal regulators must step in and impose “open access” rules to prevent a few cellular companies from controlling the 700 MHz spectrum. The FCC is still finalizing its rules for the auction.

FCC commissioner Jonathan Adelstein voiced doubts about the potential for a new national wireless broadband provider to enter the market and take on incumbent telephone and cable operators. Democratic appointee Adelstein questions whether 700 MHz newcomers will be able to deliver the goods.

“We don’t want to set the table unless we know someone’s going to come to dinner,” said Adelstein, speaking at a conference in Washington hosted by the Wireless Communications Association International.

A group calling itself the Coalition for 4G America that includes Google, Intel, EBay, and satellite television companies EchoStar and DirecTV, has been aggressively lobbying for a 22 megahertz block of spectrum with a national license. The coalition argues that such a chunk of spectrum would be necessary in order for a bidder to launch a significant challenge to the dominant cable and phone company broadband providers.

Google, Intel, and other techies are pushing the FCC to create licenses for larger geographic areas and allow “package bidding” so one company could assemble a nationwide franchise by bidding on a combination of licenses. “If you have that much power concentrated in a few players, they will have the incentive to limit or forestall innovations,” says Richard S. Whitt, Google’s Washington telecom and media counsel.

Groups like Save Our Spectrum Coalition believe 700MHz spectrum could provide inexpensive broadband to the general public, especially in rural areas.

Verizon is vehemently against proposed rule changes that would prevent incumbents from bidding or allow winners to sell spectrum wholesale. “The best thing the government can do to ensure that the country remains competitive in broadband is to open the auction to all bidders,” says Steve Zipperstein, vice-president for legal and external affairs at Verizon Wireless.

The FCC’s two Democratic commissioners have tended to be sympathetic to stricter regulations, while the remaining three Republicans have maintained that further regulations aren’t necessary. A final ruling on the 700 MHz auction has been pushed back to July, with the agency unlikely to tolerate any further delay because of a statutory deadline to conduct the auction by January 2008, and the need to give prospective bidders time to prepare applications as well as line up financing.

Critics of the “revolving door” school of telecom policy might deduce that the FCC will play it safe — allotting 10/22 MHz of “competitive” (read non-cellular) national spectrum while giving free reign to cellular operators (read Verizon) to bid up the price for “walled garden” services on the bulk of the real estate, keeping most competitors (read Google) out of this “beach front” property.