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Frequencies for sale

Mobile phone and tech companies are lobbying the FCC over access to valuable airwaves.

July 12, 2007

EARLY NEXT YEAR, the Federal Communications Commission plans to auction off the electromagnetic equivalent of beachfront property: a set of frequencies ideal for lucrative wireless broadband and mobile communications services. Now, as the commission debates the rules for those frequencies, it's being lobbied hard by two powerful, opposing forces. Existing mobile phone companies want the rules to support a restricted-access approach to broadband, while tech companies want to open the beach to all comers.

FCC Chairman Kevin J. Martin offered draft rules Wednesday with something for both camps. He would require the winning bidders on a third of the airwaves to open their networks to any compatible device, application or service, as sought by tech companies such as Google and their public-interest allies. The FCC took that approach decades ago with the wired phone network, triggering an explosion of choice and innovation in phone equipment and services. But that's not been true on the mobile phone networks, where the carriers have a stranglehold over the phones and applications that customers use.

Martin did not, however, grant the tech industry supplicants' other wish: to require winning bidders to open their networks to competing providers, which would buy access to the network at wholesale prices and then resell it. So the frequencies may not yield the result that would benefit the public most: a third, independent broadband pipe to compete with DSL and cable-modem services. Instead, the auctions could be won by AT&T and Verizon, which would have little incentive to share the frequencies with companies that want to compete with their DSL or mobile phone services.

Critics in the mobile phone industry complain that Martin's rules favor Google at the taxpayers' expense. And they're probably right about the cost -- attaching regulatory strings to the frequencies will almost certainly reduce what they fetch at auction. But the point isn't to raise the most money for the Treasury, it's to generate the broadest public benefit from these valuable public airwaves. Martin's proposal could inspire the same kind of inventiveness that's been a hallmark of the Web. Still, his draft doesn't go far enough. The FCC should also require winning bidders to provide wholesale access to their networks, at least for the frequencies in question. That's the best way to increase competition in broadband.

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