FCC OKs auction rules for unlocked phones, applications

Public-private network for emergency communications also envisioned

The Federal Communications Commission today approved rules for a planned 700-MHz auction that provide for unlocked phones and applications but do not require bidders to provide wholesale wireless services.

In addition, the rules set a requirement for part of the spectrum to create a public-private partnership for interoperable communications for public safety organizations nationwide.

The commission discussed the rules publicly for nearly two hours, voting 4-1, with Commissioner Robert McDowell "dissenting in part," as he put it. McDowell wanted fewer restrictions on potential bidders, saying that large companies might not bid on parts of the spectrum encumbered by rules for open access, meaning they could bid on other portions that are "unencumbered" and push out smaller companies from the bidding.

The four commissioners in the majority were Chairman Kevin Martin and Commissioners Jonathan Adelstein, Michael Copps and Deborah Tate.

The four in the majority said that they would have preferred a government-funded approach to a national interoperable network for public safety but said that a private-public partnership would be the next best approach. They noted it has been nearly six years since the Sept. 11 terrorist attacks, when public safety organizations could not communicate easily and added that it is time to take action.

When the spectrum auction occurs in January as planned, it is expected to raise about $10 billion to $20 billion for the U.S. Treasury. The 700-MHz band is being freed up because of the advent of digital television, freeing up analog Channels 52 to 69 on Feb. 17, 2009. Martin said many of the requirements envisioned in the auction rules could not be implemented by winning bidders until 2010.

Martin championed unlocked phones and applications, which would enable consumers to buy cell phones and applications that could be used with any wireless carrier. He held up two identical Nokia Corp. phones that he said demonstrated the problem with the way certain applications are sometimes restricted. One sold in the U.S. by carriers bans use in Wi-Fi zones, while the other, sold in Europe, allows use in Wi-Fi zones. The unlocked phone and application provision would allow use of hardware and applications across a portion of the newly allocated 700-MHz spectrum.

Tate said the vote in favor of the rules was a "very close call" for her. Among several items, Tate said she is concerned with keeping the public safety network that is created "properly protected." "None of us would want an e911 call not to be made because it couldn't find its way through a stream of movie" or other wireless content, she added.

The public-private partnership calls for a commercial licensee that wins at auction the Upper D Block of spectrum to form the partnership with a public safety broadband licensee, according to FCC documents. Together, they would develop a shared nationwide interoperable network for commercial and public safety users. Terms of the partnership would be governed by the FCC and a network-sharing agreement would be negotiated between the two partners, also subject to FCC approval.

A public-private partnership has been endorsed by many public safety groups concerned with setting up interoperable communications. Arlington County, Va., Police Chief Doug Scott and Fire Chief Jim Swartz generally endorsed the plan before the FCC vote.

Derek Poarch, chief of the FCC's public safety bureau, said that while the D block of spectrum would be shared for commercial and public safety users, public safety groups would have priority over the D block spectrum during emergencies.

Tate summarized some of the sentiment of other commissioners in noting that an open access requirement for devices and applications on part of the auctioned spectrum should encourage new applications yet to be developed. "My hope is that we've created an incubator for the next killer app," she said, noting that today's eighth graders are likely to be the innovators behind the new creations.

Copps praised the creation of the public-private partnership for emergency communications as a response to not getting a federal program. "A fully funded federal system for first responders is my preference, but that is apparently not to be, so I believe that a shared public-private model and trying to make it work is the next best thing," he said. "There are no guaranteed outcomes here."

Copps also praised the open access requirements, while saying the rules did "not go far enough" in setting up a requirement for wholesale services on part of the spectrum, a provision endorsed by Google Inc. and some consumer advocacy groups.

"We have a stultifying lack of competition in the broadband market today with the telephone and cable duopoly," he said. "By declining to impose wholesale on the C Block, [the FCC] misses an important opportunity."

Copyright © 2007 IDG Communications, Inc.

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