Late Friday afternoon, the Federal Communications Commission rejected a nearly 16-month-old petition by Menlo Park, Calif.-based M2Z Networks to receive an exclusive, 15-year license to build and operate a national wireless network in the 2155MHz-to-2175MHz band that would offer both free 384Kbps broadband with the option of paying for higher speeds.
“In return for the free 20MHz of spectrum, M2Z offered to pay the US Treasury 5 percent of its gross revenues each year.”
In the same order, the FCC also rejected a similar proposal from a company called NetFreeUS.
The FCC said that it would not allow a single company to control the slice of spectrum without first seeking broader comment on how it would be used to serve the public interest. The regulators concluded that it is preferable to conduct their usual rule-making process to set parameters for the spectrum’s use–a move that would begin “shortly,” they said.
“M2Z was the first and most prominent company to pitch the idea of getting a free slice of spectrum from the FCC.”
Furthermore, it pointed out that the 384Kbps downstream speed was quite slow and would not even be considered broadband if a new law that seeks to raise the current benchmark from 200kbps to 2Mbps is passed:
“In addition, we also note that the construction benchmarks proposed by M2Z are not particularly aggressive and are misleading as far as the actual extent of their coverage. As a result, we find that M2Z’s proposal does not serve the public interest, and in fact, that granting its application would prevent, rather than facilitate, widespread broadband deployment.”
“Many have suggested that we should auction this spectrum, while still others suggest that due to the high demand for this spectrum we should consider unlicensed use of the band,” FCC Chairman Kevin Martin said in a statement. “Each of these proposals has merit, and consideration of either would be inappropriately foreclosed by granting forbearance in this instance.”
Technology companies, including Google, expressed interest in the proceedings, though many did not support M2Z’s plan. All were in favor of opening up the spectrum to commercial use sooner rather than later, and numerous groups called on the FCC to shift the necessary bureaucratic machinery into gear.
As an alternative, several groups also said that they would welcome a decision to make the band open for unlicensed use — though possibly with a spectrum-sensing requirement to avoid the interference that has plagued the 2.4GHz band.
M2Z proposed to offer a free, ad-supported network–plus the cost of a “reception device” — that would include a mandatory filtering system designed “to block access to sites purveying pornographic, obscene or indecent material.” Users who did not want the filters or wanted speeds faster than 384 kilobits per second down and 128Kbps up could upgrade to a “premium” service, at an unspecified cost, that would give subscribers access to 3-megabyte-per-second speeds.
The regulators, in their order, said they were unimpressed by the “relatively slow speed” M2Z planned to offer its users and said the company’s proposed network construction benchmarks were not “particularly aggressive.”
The wireless industry had strongly opposed the idea, arguing it was a self-serving attempt on M2Z’s part to sidestep the ordinary process for auctioning off vacant spectrum.
AT&T and Verizon Wireless, the two biggest US mobile phone carriers, will no doubt be satisfied with the decision as they had strongly opposed M2Z’s plan, saying the airwaves should be licensed through the regular auction process. M2Z has complained that the FCC was slow to act on their request out of loyalty to wireless broadband operators and is deciding whether to challenge the decision in court.
Some politicians heralded the plan because of the filtering features and what some perceived as ambitious “build-out” goals–that is, reaching 95 percent of the American population within a decade of the project’s start. Some public safety officials also endorsed the plan because M2Z pledged to let them hook up whatever devices they pleased to the free network.
“A loose coalition of public interest groups also recently voiced reservations about M2Z’s commitment to requiring network filters on the free service, arguing such a plan raises First Amendment concerns.”
The filing, penned by the Media Access Project, said the group was not convinced the band even needs to be licensed, but if it is, the group urged the FCC to impose Net neutrality requirements on those who license that slice of spectrum and require that they sell it on a wholesale basis.
Jonathan Adelstein, one of the two Democratic commissioners, agreed with the decision, though he showed impatience at the slowness of the proceedings so far.
“So I’m disappointed that despite the aggressive interest in and availability of this spectrum,” he said in a statement, “the Commission is only now expressing its intent to seek comment on service rules for this band.”
Chairman Martin expressed his own willingness to consider both licensed and unlicensed uses for the band and promised to “adopt flexible rules that will encourage the innovative use of this unique piece of spectrum.”
“The companies still might get their way, but it will only be after a more public and lengthier proceeding that will quite possibly culminate with an auction.”