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Into the ether-Net

Here's the FCC's deal: Free, but slow, Internet access -- oh, and no porn. Now, who's buying?

June 09, 2008

Free wireless Internet service is such a compelling idea, even waves of failure can't seem to kill it. The latest proposal comes from Federal Communications Commission Chairman Kevin Martin, who wants to auction off a band of airwaves with a couple of potentially strangling strings attached: The winner must use part of the band to provide Internet access at no charge, and traffic on the free service must be filtered to block pornography.

Details of Martin's proposal are scarce, but it resembles a petition filed two years ago by M2Z Networks. A Silicon Valley start-up, M2Z asked the FCC to give it a swath of frequencies for 15 years at no charge. In exchange, the company promised to provide free but comparatively pokey wireless Internet service, with porn filters built into the equipment it supplied to users. It also offered to pay the Treasury a percentage of the revenue it made providing faster Internet access for a fee. The commission rejected that proposal (and a similar bid by another start-up) last year, saying it wanted to consider opening the frequencies for unlicensed uses and other alternatives. Its order also expressed skepticism about the slow connection speed M2Z planned for the free service.

Evidently, Martin didn't find the alternatives compelling. His new plan mirrors M2Z's vision of a hybrid network that's reserved in part for free, filtered service. The main difference is that it would require the winning bidder to pay the Treasury up front rather than forking over a share of the proceeds after the network is built. That twist adds to the financial risk of the project, which would have to compete with improving but pricey offerings from Verizon Wireless, AT&T, T-Mobile and Sprint Nextel. Yet the dismal record of recent wireless start-ups suggests that the original M2Z proposal was risky enough to begin with. Ambitious wireless broadband projects in Philadelphia, San Francisco and other cities have been waylaid by high construction costs and low demand. And the operators of those projects had a significant advantage: Because they used unlicensed WiFi frequencies, they paid nothing for them.

The wireless phone companies have sharply criticized Martin's proposal, saying the winning bidder's service could interfere with and undermine other services in adjacent bands. In a nod to critics, Martin withdrew the plan from the agenda for the commission's June 12 meeting. Still, it's hard to resist the chicken-in-every-pot appeal of the proposal. Depending on who won the auction, it could lead to more competition in broadband service. The construction requirements -- 95% of the country's population would have to be served within a decade -- could push broadband into underserved rural areas. And even if they were comparatively slow, the free connections could spur innovation in devices and Web services by providing ubiquitous, continuous Internet connectivity. After all, the "always on" nature of DSL and cable modem service is just as transformative as the increased speed.

These potential benefits more than outweigh the cost of the plan, which is sure to produce lower bids than if the airwaves were auctioned without condition. The main drawback is the filtering requirement, which aims to protect minors but could affect all users of the free service. Automated filters invariably exclude legitimate content, and they don't pose much of a barrier to computer-savvy youths obtaining illicit content. A better approach would be to bar the winning bidder from blocking legal uses of its airwaves rather than imposing a duty that can't effectively be met.

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