10 September 2007
FCC: Is an auction still best to allocate the airwaves?
A wireless company attempts to get sweetheart-spectrum deal from FCC.
CEO does not reveal that he once worked for the FCC on CNN’s “Your $$$$$” on September 8, 2007.
“Do you want to get free wireless internet service?” Asks Ali Velshi, host of “Your $$$$$.” “Well you could, but the Federal Communications Commission dismissed a proposal” to provide this broadband service to everyone, everywhere across the nation.
Velshi was in high dudgeon, “It can’t be true. It sounds like a great idea.”
Guest John Muleta, CEO and Founder of M2Z Networks has a plan to provide this free wireless internet service, if only the FCC had approved his application.
Why did the FCC rule against M2Z? Why oppose free service for consumers? Muleta says he has the answer, “The only people that opposed…are…big telcos who make a lot of money from…wireless broadband.”
Earlier Velshi told the audience, quoting Muleta: “Pressure from telecom giants Verizon and ATT is preventing you from getting a free, fast internet hookup…”
Muleta was a somber, unsmiling CEO with a compelling argument. His company objective is “to provide fast, free, family-friendly wireless broadband Internet connectivity to 95% of the
Velshi offered an answer: the FCC “likes” to auction off broadband spectrum. And, he added, the FCC makes a lot of money from wireless broadband.
Is that really the issue? Since CNN didn’t provide any competing viewpoints, I sought out some perspective on the issue. Frank R. Jazzo, an attorney familiar with the application and M2Z is an expert in compliance with the rules and regulations of the FCC. He said the issue was simple. “As a general matter, the FCC follows Congressional legislative intent [where] the spectrum must be auctioned off.”
Jazzo who is the co-manager at Fletcher, Heald & Hildreth in Arlington, Virginia, explained that the government did not wish to repeat mistakes in the spectrum land rush of years past, where middle men simply acquired at low cost the rights to the public airways, then redirected to companies that would actually create value.
Muleta said his company, “would pay the American public 5 per cent of the revenues” in exchange for a license. This would avoid Muleta’s company from having to compete for the spectrum by bidding and creating the fair market value.
John Muleta was most articulate on the workings of the FCC. As well he should be: CNN didn’t mention that he was the head of the FCC’s Wireless Telecommunications Bureau from 2003 to 2005.
***
The Land Rush of 1889 encouraged settlers to stake a claim on 160 acres. With a caveat: a settler must physically live on and improve the land. Only then could the settler secure the title. But even so, there was rampant cheating. In today’s Spectrum Rush, Congress has decided that the best way to avoid cheating, and to ensure compliance to the public interest, is to license the broadband spectrum to the highest bid
See Washington Post, Selling a Long-Shot Idea: Free Internet Access, Former Regulator Bucking Telecoms, Internet Giants and a Skeptical FCC.
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