FCC idea sets off firestorm over access to mobile Net
EXPERTS SAY NEW TECHNOLOGY BOOM IS AT STAKE AS AT&T BATTLES GOOGLE
By Elise AckermanMercury News
Article Launched: 07/16/2007 05:34:58 AM PDT
For months, the nation's largest telecommunications companies and biggest technology brands have maintained an uneasy truce while investing billions of dollars in an attempt to dominate the mobile Internet.
Now, thanks to a proposal by a little-known government official, all-out war has broken out between the two sides over the potential payoff for those huge bets.
At stake is an area of the nation's airwaves, now used to broadcast UHF channels, that could support a new nationwide high-speed mobile network. Technocrats in Silicon Valley and Washington, D.C., believe this network can kick off a technology boom reminiscent of the late 1990s.
They envision a cornucopia of new mobile gadgets that can be used anywhere to shop, play, socialize or study.
The problem is telecoms like AT&T and Verizon vehemently oppose conditions suggested by Silicon Valley heavyweights that would dramatically open access to the new network, placing them in opposition to Google, eBay and Frontline Wireless, a start-up company back by famed venture capitalists L. John Doerr and Ram Shriram, who also backed Google.
"Our members want a fair, open auction where anyone can come and bid on spectrum and that whoever wins the spectrum is free to do whatever they want with it," said Joe Ferran, a spokesman for the CTIA - the Wireless Association, whose members include all the major telecommunications companies.
The dispute hinges on the fundamental distinction between the traditional Internet, the one consumers access through dial-up or DSL or cable, and the wireless Internet.
With the traditional Internet, customers can use any computer and take advantage of any application on the Web. On the wireless Internet, access to different types of gadgets and different programs is tightly controlled by the wireless carriers.
United by opposition
Neither the telecoms nor the technology companies are happy with a proposal circulated last week to the four members of the Federal Communications Commission by FCC Chairman Kevin Martin, which included a requirement that the network be accessible to new applications and devices, similar to the traditional Internet.
While that provision was part of what public interest groups and technology companies requested, Martin left out a crucial requirement that the owner of the new network be required to resell broadband access at wholesale rates.
This would enable a company like Google to launch a wireless service without spending billions of dollars to build its own network. Such a requirement could also make that part of the spectrum less desirable for telecoms looking to recoup their costs.
Commission members are expected to review Martin's proposal and approve final rules for auctioning the 700-megahertz spectrum later this month or in August. It's still possible that members could decide to include a wholesale requirement, a critical issue for technology companies.
But time is short. The airwave auction must take place before Jan. 28, 2008. The spectrum will be handed to new owners in 2009.
In a blistering letter released on Friday, AT&T threatened to sue the FCC if it went along with Google.
"Google's request - to obtain a leg-up in the auction process through the artifice of `open access' regulation - is a self-serving attempt to obtain spectrum at discounted rates that would turn the clock back on a decade of bipartisan consensus on the proper approach to wireless deregulation, deprive taxpayers of billons of dollars, inhibit the explosive growth of wireless broadband and - perhaps most importantly - expose the commission to reversal in the courts," wrote Robert Quinn, AT&T's senior vice president for federal regulatory.
Criticism for AT&T
"What they are saying is we are going to sue you if you don't do it our way," said Art Brodsky of Public Knowledge, an advocacy group. "AT&T has to get over this Google-on-the-brain thing. . . . This is not just for Google, it is for every innovator, every developer, every chip developer in Silicon Valley and every place else."
Richard Whitt, Google's telecom counsel, said in an interview that he did not want to respond directly to allegations made by AT&T and other telecoms. "Google supports open broadband platforms that generate new and innovative applications and services for all Americans," Whitt said.
Amol Sarva, a mobile technology entrepreneur and a member of the Wireless Founders Coalition for Innovation, said without the wholesale provision the biggest telecom companies will remain gatekeepers to the mobile Internet.
"There is no technical reason why we shouldn't have the rules in wireless" (about open access), said Christopher Libertelli, the senior director of government and regulatory affairs at Skype, which allows free phone calls over the Internet but is forbidden by the terms of service of many wireless carriers.
He said there is "a growing list of discriminatory and anti-competitive practices" in wireless, and the FCC's auction rules for the new spectrum should balance the interests of carriers and software developers. Such an approach would maximize the value of the airwaves and be in the best interest of consumers, he said.
"If there is a new open wireless network there is an explosion of new products and services waiting to be developed," Libertelli added.