Muleta Says M2Z Broadband Proposal Remains on Track
M2Z’s proposal to offer a 10 MHz national broadband network in the 2155-2175 MHz spectrum band is progressing as planned, and the future of the proposal now in the FCC’s hands, CEO John Muleta said Fri. “The status update is that the FCC accepted the application Jan. 31,” said Muleta, who spoke to a Progress & Freedom Foundation seminar on the proposal. “We think it’s a solid application and think it’s in the public interest and makes the best use of the spectrum. But I'm going to decline to make any predictions.”
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Muleta said some confused the proposal early on with Cyren Call’s proposal for a 10 MHz public safety broadband network, but at this point “we don’t think there’s any confusion between the 2.” M2Z’s proposal has produced fewer headlines than Cyren Call’s. But Cyren has had to go to the Hill seeking legislation after the FCC decided it couldn’t reallocate spectrum in the 700 MHz without an act of Congress. M2Z contends that the FCC can reallocate the 2.1 GHz spectrum on grounds it would promote broadband deployment and serve the public interest. M2Z asks for a 15-year license and promises to provide coverage to 95% of the American population within 10 years. M2Z also said it would pay 5% of gross revenue from premium and wholesale subscription services to the U.S. Treasury.
“It’s within the FCC’s authority and they're considering it and that’s where we're at,” Muleta said: “We haven’t even received all the comments to the public notice, so it’s hard to say what the arguments are… It’s hard to predict where the Commission is going to come out.” Muleta noted that the FCC grants about 500,000 licenses applications yearly: “We're not asking for any different process.”
The M2Z proposal generated some heated discussion during Fri.’s lunch. Christopher Guttman-McCabe, CTIA vp-regulatory affairs, said the 2.1 GHz band is valuable spectrum adjacent to that sold in the advanced wireless services action and should also be sold at auction.
“What problem are they seeking to solve?” Guttman-McCabe asked. “The overwhelming majority of counties have multiple broadband providers and we believe that wireless is going to continue to be a very aggressive broadband competitor. We question, if M2Z is going to hit the population centers in 3, 5 and 10 years, is this the right investment for government… In essence, it is an investment for government if they're giving away billions of dollars worth of spectrum to be used for a competitive broadband service.”
Guttman-McCabe said the M2Z proposal would suffer from one of the weaknesses of the failed NextWave proposal. “M2Z would pay some of the money from the revenues on its subscriptions service over time,” he said. He said the world and the broadband service available will be very different in 10 years. “Look at the evolution of our service,” he said: “Ten years ago we were still using bag phones. We've moved from bag phones to a device that provides Internet access, e-mail, all of your contact information. It’s a digital video recorder. It’s an iPod.”
“It’s an intriguing proposal and could be something that is appealing to some residents of the U.S., particularly low income people, but the speeds aren’t all that great,” said Robert Atkinson, pres. of the Information Technology & Innovation Foundation: “It’s sort of second-class broadband, but it’s better than dial up, to be sure.”
Atkinson questioned how much interest there will be when the service hits most rural areas that don’t have broadband options now. “In 7-10 years you would envision that wireline broadband would roll out even further,” he said: “One of the core arguments they make is that this is a service that would give a lot more people broadband who don’t already have it, and I'm a little skeptical that this is the case.”
But M2Z has also attracted grassroots support, as evidenced by filings in a Commission docket examining its proposal. The Assn. of Community Organizations for Reform Now (ACORN), for example, said it had reviewed M2Z’s filings and “I believe that the proposal represents some excellent opportunities to begin reshaping the broadband marketplace in the United States… M2Z has assembled an impressive application that is highlighted by several public interest obligations that M2Z has voluntarily made conditions of its spectrum license proposal.”
“In recent years, we have seen the need for a more civilized communications system among first responders,” said Mayor Isla Tullos of Raymond, Miss. “I have heard of other proposals of this nature, but in those cases the taxpayers would bear the burden. Why make the taxpayers responsible when the market has generated a solution?”
“Once operational, the M2Z network will give cities and counties new competitive options that will lead to significant savings and improved service quality,” said Alan Shark, exec. dir. of the Public Technology Institute. “PTI firmly believes that the public interest will be well served by the FCC granting the M2Z application in a timely manner.”