Tue, Jul 10th 2007 3:03pm
Just last month, we noted how FCC Chairman Kevin Martin sounds like a broken record when it comes to telecom policy, always covering the same ground with his same old ideas of what constitutes a competitive market. Maybe the summer heat has gotten to him, but he's now gone and changed all that, as he's getting ready to propose dramatic new rules for the upcoming 700 MHz wireless spectrum license auction, mandating that winners of licenses for a third of the spectrum build open-access networks -- networks that allow any compatible device to connect and for any service to be run across them. The 700 MHz spectrum is pretty prime real estate, as these things go: there's a lot of spectrum that will be available, and the low frequency gives it excellent propagation and building-penetration characteristics. There's been a lot of talk from tech companies and other groups about handling these licenses differently than previous ones, in order to encourage the development of broadband wireless networks that offer real competition to fixed-line networks. Typically, this entails mandating that license winners build wholesale networks which sell access to any service provider that wants to then sell the service on to consumers. While Martin's draft of rules doesn't go that far, it does offer a significant change to how wireless spectrum licenses have typically been sold and regulated. Unsurprisingly, the trade group of cellular operators isn't happy, and says that there's no need to regulate what it sees as a perfectly competitive marketplace. Whether or not the cell phone service market is competitive is an argument for another day, but it's pretty clear that as things stand now, it doesn't have much of a competitive impact on the broadband market, which is still largely a duopoly of cable and telephone companies. The operators hope to use their deep pockets to buy up as much spectrum as possible -- not just to use it themselves, but to keep it out of the hands of any potential new entrants that could come into the market and actually compel them to compete.
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