Verizon sues FCC over open-access spectrum auction

IDG News Service - Verizon Wireless has encountered strong opposition to its request that an appeals court overturn Federal Communications Commission auction rules on a portion of wireless spectrum.

In a brief filed Monday, Verizon asked the U.S. Court of Appeals for the District of Columbia Circuit to review the FCC's decision to require so-called open-access rules on about a third of the 62 MHz of spectrum in the 700-MHz band scheduled to be auctioned in January.

The FCC voted in July to require that the winner of 22 MHz of spectrum allow any wireless devices to connect to the network, meaning wireless telephone customers could bring their handset devices from other carriers. The FCC also prohibited the winning bidder on the 22-MHz block of spectrum from blocking or slowing wireless and Web content from competitors.

Those rules are "arbitrary, capricious, unsupported by substantial evidence and otherwise contrary to law," Verizon Wireless said in its brief.

Verizon spokeswoman Debra Lewis said the company will let the brief "speak for itself."

Media reform group Free Press, a supporter of the open-access rules, accused Verizon Wireless of sending "lawyers, FUD [fear, uncertainty and doubt] and money" in an attempt to overturn the FCC's decision. The FCC's open-access rules were a "small step on the long road to breaking up the anticompetitive, anticonsumer oligopoly that controls almost every level of the wireless marketplace," Free Press said in a statement.

Frontline Wireless LLC, another supporter of the open-access rules, said in a statement that Verizon's lawsuit "throws a wrench into the auction to promote competition and innovation for consumers."

Google Inc. also criticized Verizon's lawsuit. The open-access rules are "a big step for consumer choice and competition," Chris Sacca, Google's head of special initiatives, wrote on the company's public policy blog. "Apparently, one of the nation's major existing wireless carriers doesn't think consumers deserve more choices."

The wireless spectrum is a valuable public resource, Sacca added. "The nation's spectrum airwaves are not the birthright of any one company," he wrote.

The 700-MHz spectrum is being abandoned by U.S. television stations after Congress has required them to move from analog to all-digital broadcasts by February 2009. Many technology, broadband and wireless vendors are eyeing the spectrum for next-generation wireless and broadband services. Wireless signals can travel about four times farther in the 700-MHz band as signals in higher bands.

Many groups calling for Net-neutrality laws for broadband providers have suggested that the 700-MHz band is the best chance in the coming years for a third broadband service that competes with cable and telecommunications providers. The open-access rules, similar to Net-neutrality rules, could help foster a third competitor, but many open-access supporters wanted the FCC to also require the winning bidding to provide wholesale access to competitors at wholesale prices.

Verizon Wireless and other critics have suggested that the open-access rules will limit the options for the spectrum. The rules could drive down the price the U.S. government gets for the spectrum, and they could discourage the winning bidder from rolling out innovative services on the spectrum, critics have said.