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. identicon
    RandomThoughts, 5 Sep 2007 @ 10:24am

    Mike, who decides what makes sense? If I were Verizon, it would make sense for me to use the spectrum for say backhaul or data and keep my current spectrum for voice. Of course, by doing so, Verizon would limit competition.

    How can you say "let the market decide" and then say that if it isn't used how you like, they would lose it?

    At the end of the day, the govt. wants to sell the spectrum. Its revenue. It helps pay off the debt.

    Also, I find it hard to believe that wireless costs have went up for consumers. Total billing may have went up due to the addition of data networks, ringtones and other things, but plans have gotten cheaper in both dollar amount and the additional talk time.

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