Open Access for the 700 MHz Band to be Decided July 31

After a Capitol Hill appearance Tuesday, Martin had said the item would not go onto the July meeting agenda for lack of consensus (CD July 25 p1). At issue is whether the other four commissioners will agree with Martin and require the bidder or bidders getting 22 MHz of spectrum in the upper 700 MHz band to allow any device on its network and not to block access to any application. “No lock, no block” are two of four tenets Google advocates. Google also wants a wholesale requirement and interconnection. The last two are not part of Martin’s proposal.

In the past, the FCC first has issued service rules for a specific band, then a public notice of the auction’s start along with detailed auction rules. The rules list licenses to be auctioned and special stipulations for bidding.

In the 700 MHz context, that would mean that after the Tuesday meeting a public notice would give the band plan, stating if combinatorial bidding is allowed, if bids will be kept secret, known as blind bidding, and whether Frontline Wireless will be classified as a designated entity. All these issues are contested hotly but perhaps overshadowed by the debate on how much of Google’s proposal the FCC will apply to 700 MHz licensees.

Calling it “standard practice” to issue the auction- rules public notice separate from service rules, an FCC spokesman told us there will be two separate documents. This conflicts with what others inside and outside the commission believe. Those expecting all issues to be resolved say the public notice will be limited to announcing the auction date, which by law must be before Jan. 28.

Also on the agenda: Rules aimed at reducing rural wireless company complaints about wholesale roaming rates they must pay when subscribers roam on larger carriers’ networks. Sources expect the FCC to require rates to be “just and reasonable.” (CD July 12 p1). --Heather Forsgren-Weaver

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Mandatory open access in the 700 MHz spectrum would be a “public policy mistake of the first order” and raise “serious legal problems,” Verizon Wireless warned the FCC in a late Tuesday ex parte filing. From a policy standpoint, “there is no competitive failure that could warrant such unprecedented intrusion” and regulating the openness of wireless devices and applications could harm the “privacy and security of consumers and wireless networks,” the company said. “Far from ‘opening’ access, government intervention would in reality be mandating ‘forced access.'” Numerous legal barriers “preclude the Commission from adopting ‘open access’ conditions in this or any other proceeding,” Verizon Wireless said. The company warned the action would “violate the Administrative Procedures Act and the auction statute in multiple respects, violate the First Amendment, exceed the Commission’s statutory authority on numerous grounds, and violate both FCC and Congressional policies.” Verizon Wireless is the second large wireless company to warn about the legal ramifications of imposing open access. AT&T did likewise, then last week retrenched in favor of a compromise plan by FCC Chairman Kevin Martin. Meanwhile, University of Chicago Prof. Richard Epstein said open access conditions could “reduce both market and social value of the spectrum.” The best route is “a simple common law property rights approach,” he said. “No matter what Google, AT&T or anyone else may think, this is one case in which the fewer the conditions, the stronger the property right,” Epstein said in a paper released by the Free State Foundation. “The stronger the property right, the greater the return from the spectrum to be auctioned and the greater the enhancement of long-term consumer welfare.”