FCC Not Convinced To Just Hand Over Spectrum To Startup In Exchange For Potential Future Profits

from the FCC-prefers-its-money-upfront dept

In May of 2006, a VC-backed startup called M2Z petitioned the FCC to hand over some spectrum for free in exchange for a cut of future potential revenues. As you're probably quite aware, the FCC has been focused lately on auctioning off slices of spectrum to private companies for use in various wireless projects. The spectrum seems to only be getting more and more valuable as demands for potential wireless applications and services increase. Of course, as we've seen in the past, these spectrum auctions don't always work out so well, with companies overbidding and being unable to actually do much with the spectrum. Part of the problem is that the FCC wants to put all sorts of rules on the spectrum usage, rather than letting it be used for whatever makes the most sense, like some other countries.

However, the M2Z proposal seemed pretty questionable in its own way, promising nothing up front, and then making plenty of promises on the backend. The company claimed it would cover 95% of the country in broadband in 10 years, would have a "free" tier that was relatively slow and filtered, a more expensive upper tier, as well as offering priority for public safety uses. It may have been intriguing simply for the fact that it was different, but the FCC wasn't convinced. As has been expected for quite some time, the FCC has rejected the proposal, though some believe that the debate over this topic may eventually lead to good things from the FCC with the spectrum it's going to release in the near future. Of course, in the end all this really highlights is that the FCC still is focused on dribbling out bits and pieces of spectrum using different rules and regulations each time -- rather than coming up with a truly comprehensive spectrum allocation plan. Of course, some of us have been pointing this out for years, and the FCC never seems to get any closer to a comprehensive spectrum allocation policy -- and the country continues to suffer for it.
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Filed Under: fcc, spectrum, spectrum auction, spectrum policy, wireless
Companies: fcc, m2z


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  1. icon
    Mike (profile), 4 Sep 2007 @ 11:48pm

    Re: Disagree about spectrum use

    Hi Dave... always good to hear from you, though you may have misunderstood my point. I'm not talking about cognitive radio (which I'm not convinced is close, as you say), but about the FCC trying to pick and choose what each bit of spectrum should be used for without letting the market actually weigh in.

    I'm much more impressed by the effort in the UK to sell the spectrum and allow it to be used by the owners for whatever makes the most sense.

    I'm not against offering up more spectrum to try to increase competition -- but I don't think having the FCC set a bunch of rules is the way to do that. As for the problem of the big telcos sitting on the spectrum, I again have no problem with a use it-or-lose it type rule for spectrum allocation.

    But the point is that the current policy of dripping and drabbing out different pieces of spectrum, heavily laden with ridiculous rules (remember all those fake small companies bidding for spectrum that really represented big companies?) is really making a difference.

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