Can The FCC Get Free Wireless Internet To Work?
Correction: White Space refers to spectrum in the analog channels, which operate between 54 MHz and 698 MHz. As proposed, AWS-3 spectrum resides in the 2155-2180 MHz band. The FCC intends to auction off the AWS-3 spectrum for free wireless internet access. Post edited to correct original error.
SEE ALSO: FCC Floating a Free Wireless Internet Plan As Part of New Auction
The FCC is taking another stab at crafting a policy that aspires to create a free nationwide wireless broadband network to encourage the adoption of broadband (well, as long as it’s not used to access porn). The idea is not new, and the last proposal failed miserably, so it begs the question: Why will it work this time around? To find out the answer, we asked John Muleta, a former head of the FCC’s Wireless Telecommunications Bureau and co-founder of VC-backed M2Z Networks, which plans to participate in the auction and use the spectrum to offer a two-tiered network, one that is free and supported by advertising, and another higher-speed network that costs a fee.
The proposal, which is written by outgoing FCC Chairman Kevin Martin and is up for a vote in two weeks, will require the winner to build out free broadband access in 95 percent of the country within five years. To show just how serious he is about the conditions, Martin added this caveat: if the company that buys the license fails to meet those requirements, the FCC will reclaim the spectrum and make it available to anyone that might have a better chance at accomplishing the goal, the WSJ reports. Commissioners will decide whether or not that provision makes it into the final item.
We talked to Muleta recently about his how his plan differs from others that have failed before. Think of it as a good, better, best scenario. Muleta compares it to having high-quality cable or satellite television in the living room, but relying on free, over-the-air TV in the bedroom. “It doesn’t matter what income you have,” he said. People might prefer cable broadband at home or in the office, but when they leave those networks, free internet would fill in those gaps. But previous FCC proposals have failed and some of the companies that have been attempting to provide municipal Wi-Fi for years have either folded or are spinning their wheels at best. Muleta thinks a new entrant can make it work. “Access to the cloud is a duopoly, there’s no competition.” To be sure, it will be a herculean task to build out this network within five years, but Muleta thinks the key is in having nationwide scale, something municipal Wi-Fi efforts didn’t have.
M2Z Networks won’t disclose how much funding it has, but it’s backed by a group of heavyweight investors including Kleiner Perkins, Charles River Ventures and Redpoint Ventures. The FCC hasn’t said if there will be a minimum bid requirement, or how much they expect to raise from the spectrum’s sale, but typically a nationwide license like this would be in the millions, if not billions. Muleta said he fully intends to bid on the spectrum if the agency “allows for technology neutral use” and doesn’t put rules in place that would preclude a new entrant from accessing the AWS-3 spectrum. Martin’s plan is widely disliked by incumbent wireless and wired operators who see it as a threat to their existing revenue streams. But Muleta argued that the general thrust of any FCC policy should be to create more options for consumers.
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