M2Z Makes Case Against FCC’s Inaction on Its Free Broadband Proposal
M2Z attorney Viet Dinh faced tough questions from judges on the Court of Appeals for the District of Columbia Circuit Monday as the company pressed its claims that the FCC violated the Communications Act by not ruling within a year on its 2006 petition seeking a license for the 2055-2075 MHz band to offer a free national broadband service.
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The FCC is still considering a proposal by Chairman Kevin Martin to devote the AWS-3 band to a national free broadband network like the one proposed by M2Z -- but through an auction that would require the company to buy a license. That proposal is stalled at the FCC but probably will come up again under the next chairman. Attorneys for T-Mobile, the main opponent of the plan, CTIA and other interests were in the courtroom Monday to hear arguments. So was John Muleta, M2Z’s CEO and a former chief of the FCC’s Wireless Bureau.
The appeals judges heard M2Z’s case that the FCC had violated sections 7 and 10 and related provisions of the Communications Act in rejecting the company’s original proposal (CD Jan 5 p1). Section 7 requires the commission to rule within a year on any proposal for a “new service” using “new technologies” that’s in the public interest. M2Z argued that the FCC, which dismissed the petition in 2007, never dealt with the company’s public-interest arguments or the hundreds of letters of support it received.
Judge David Sentelle said the remedy M2Z sought was as “breathtaking” in its breadth as anything he could remember. Judge Thomas Griffith questioned whether M2Z was trying to short-circuit the FCC’s decision-making process. “You'll acknowledge you'll have some waiver problems here,” he told Dinh. “The case law is pretty clear.”
Dinh, a former assistant U.S. attorney general, told the judges that the FCC “decided not to decide” on the best use of the spectrum, which was “fallow” for decades. “The FCC has done nothing to allocate it,” he said. M2Z said in its court papers that in the 14,100 words and 117 footnotes of the order, the commission “did not cite one filing in support of M2Z; nor did it mention any of the evidence M2Z submitted.” Dinh said in the oral argument, “All that we ask for is a fair consideration of our application.”
FCC attorney Joel Marcus mainly took questions from Judge Judith Rogers about the history of section 7 of the act and whether it required the FCC to make a decision, as M2Z argued. Griffith noted that the proposal by M2Z was to offer free nationwide broadband. “That’s new,” he said.
Marcus said, though there’s scant legislative history, section 7 was passed because Congress thought the Commission had been slow to act on some new technologies in the late 1970s and the 1980s. “It’s clear that the Congress wanted the FCC to act faster than it had been acting,” he said. But he also argued that the requirement shouldn’t force the FCC to “override” all of its other licensing rules. Section 7 isn’t “a magic wand” that “you wave over the commission, and you get a license,” he said.
Marcus also questioned whether the proposal was truly innovative. He likened it to the TV commercial in which an actor holding a chocolate bar collides with an actor holding a jar of peanut butter and the peanut butter cup is born. “Here there was in fact no new candy,” he said. M2Z was only planning to offer the traditional candy bar “in a new wrapper” and “at a different price point,” he said.
Marcus also said the FCC had to treat fairly six other applicants that also sought the spectrum in its decision, and deal with “interference concerns” raised by the M2Z proposal. He said the spectrum wasn’t “fallow,” as M2Z claims, since about 1,800 licensees operate in the band.