700MHz Club Members Tussle Over Open Access

The FCC will unveil its rules for the upcoming 700MHz spectrum auction within the next few weeks; in the meantime, companies continue to argue how they, and consumers, should be able to use the wavelength.

What stands out is the push for open device access – Skype and Google Inc. have led the fight for Carterfone-like regulations to apply to parts of the 700MHz spectrum. That means anyone could attach any legal device to the network.

The incumbents have resisted the idea, although the Wall Street Journal reported this week that Verizon Communications Inc. has conceded somewhat. The newspaper said Verizon will agree to open access rules on portions of spectrum. That’s a major shift for Verizon, the carrier that’s most strict about which devices can be used with its wireless network.

AT&T Inc. also has acquiesced, although it only did so after Google last week promised the FCC it would bid $4.6 billion on spectrum if the open access clause is official. Wireless association CTIA criticized the move as a bribe.

All of this comes as the feds count down to Feb. 17, 2009 – the final day of analog TV broadcasts in the United States. Once broadcasters move to digital signals, the 700MHz band will be freed up; wireless companies covet the spectrum for its 4G possibilities. The auction is set to begin next January.

Skype and Google argue that an open access requirement would promote innovation, as happened with wireline phones in the 1960s. But there’s no assurance yet as to how devices made for different protocols would interact with one another on the same spectrum. The costs of such an endeavor also are unclear. Carriers presumably would have to add on to their networks, never an inexpensive undertaking.

To that end, international telecommunications consultancy The Shosteck Group warned Google this week in a blog that “the lack of thought regarding devices points to a lack of understanding of the relationship between engineering, technology, and business issues. Companies have failed by not recognizing the importance of these interrelationships."

Still, corporations including Google and Frontline Wireless, a provider headed by former FCC Chairman Reed Hundt, are pressing ahead. Not only do they want open access, they also want such a condition to apply to wholesalers. According to industry rumor, however, it seems FCC Chairman Kevin Martin has quashed that idea to appease the Bells. If a Bell competitor got ahold of spectrum and then leased it to a provider (such as Google appears to want to be) with an open device policy, the Bells eventually would be forced to open their entire networks as well – a prospect they can’t stomach.

An unofficial draft of the auction rules has been making the rounds in Washington and it reportedly calls for open access, but only on small slivers of spectrum. That’s a relief to the powerful Bell companies that want to maintain control and exclusivity of the equipment subscribers may use.

AT&T Inc. www.att.com

CTIA www.ctia.org

FCC www.fcc.gov

Frontline Wireless www.frontlinewireless.com

Google Inc. www.google.com

Skype www.skype.com

The Shosteck Group www.shosteck.com

Verizon Communications Inc.www.verizon.com