by Carlo Longino

VCs Offer Free Wireless, Revenue Share In Exchange For Spectrum

from the do-you-take-IOUs? dept

In light of a huge spectrum auction that's scheduled to begin next month (barring any unexpected delays), some different ideas for spectrum allocation are being tossed around. There's the potential to further embrace open spectrum plans, but three well-known Silicon Valley venture-capital firms have another idea. They've formed a company and asked the FCC to grant them a 15-year license for 20 MHz of the advanced wireless services spectrum. They'd then hand over 5% of the gross revenues from a paid, high-speed wireless broadband service, but they'd also provide a slower, ad-supported free service -- much like the plans Google and Earthlink have discussed for the San Francisco WiFi network, but presumably using a wide-area technology. It's an interesting proposition, and has already provoked an annoyed response from the trade group of wireless carriers, since the current auction system favors them over new entrants. One potential stumbling block of this type of plan is that it could tie up spectrum and let it sit unused should the company fail -- but there are ways around that, and in any case, it's not like that hasn't happened with auctions in the past. There are a couple of issues with the current spectrum management policy. First is that it's not all that efficient, leaving valuable frequencies underutilized, and second is that it's become such a valuable resource that it's incredibly difficult for new entrants to get into the wireless business, hampering competition. While the VC firms' plan may not be the best solution, it's good to see people looking for alternative plans to the big-bucks, incumbent-favoring auction method.

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