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May 30, 2008

The Federal Communications Commission is considering a plan to auction off even more spectrum.

However, there is a stipulation that the bidding winner would provide free broadband Internet access to the whole country.

There's no doubt that this is a 'mighty order' considering the winning company would be paying for the right to build a national wireless network and then paying again to provide free service to millions of Americans... (!)

As of yesterday, there's no part of the commission’s plan that explains how a company would fund this effort.

Industry skeptics also have cited that most major wireless providers have just refreshed their spectrum holdings at the commission’s most recent auction, or through acquisitions. These objections, however, don't rule out that some companies would still be interested in this new and unusual project.

In 2007, Startup M2-Z Networks proposed a similar plan to the FCC, but M2-Z wanted the spectrum for free.

The company hoped it could pay for the expense of building the network through advertising dollars and selling subscriptions for consumers who wanted faster service.

M2-Z also offered to pay the U.S. Treasury 5 percent of all its revenue for use of the airwaves.

The FCC's proposed wireless spectrum is a 25 MHz block, and the commission would require that at least a portion of the airwaves be set aside for free Internet access.

The winning bidder would have 4 years to build out its network to at least 50 percent of the population and within ten years would be required to reach 95 percent of the continental (48 states) United States population.

An industry observer that asked that his name no be published was quoted as saying "it is in deed a very audacious project on many levels. I doubt very much that the FCC will be able to pull this one off."

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    This article was featured on Business 5.0.

Source: The FCC.