The battle for open skies is really starting to heat up, as we creep every closer to the start of the Federal Communications Commission anticipated auction of the 700MHz band spectrum which is slated to happen in January.
Frontline Wireless has petitioned the FCC to lower the minimum prices set for the spectrum licenses, in order to allow smaller wireless companies to effectively compete in the auction.
Here's why this is more than a money issue: The FCC has set minimum prices for each of the five spectrum blocks up for bid. If those prices aren't met during the bidding the block will be re-auctioned -- but without the service conditions attached to it in the original auction. The key issue here is that the highly coveted C Block has a reserve price of $4.6 billion with open skies service conditions that require the spectrum winner to allow customers to use devices and software of their choice.
"The incumbent bidders who have both the most money with which to bid and the most to lose from open access platforms, namely Verizon and AT&T, will rationally act to defeat the conditions by refusing to bid or low-balling their bids," Frontline stated in its petition. "Because the incumbents have deep pockets and can afford to bid high for the spectrum in re-auction, they will have effectively been given the opportunity to buy their way out of the open access conditions."
Sounds pretty plausible to me.
Meanwhile, Verizon has already taken the whole matter to court, charging in a suit filed earlier this month in the U.S. Court of Appeals for the District of Columbia, that the open skies conditions are "arbitrary and capricious, exceed the FCC's authority and violate the First Amendment."
"Let’s say you’re an entrepreneur who has an idea to build a wireless fob that finds your keys even if you left them in Virginia or Barcelona. Or say you want to design a refrigerator that transmits a signal to Safeway, instructing it to deliver a gallon of milk every time you’re running low. To enter the market you will have to turn to one of the four mobile phone carriers that today exercise an oligopoly over wireless device communications: Verizon Wireless, AT&T, Sprint and T-Mobile.
luck. Get ready for an endless set of hurdles, including lengthy trials, revenue sharing and demands to cripple or modify features, without any guarantee of final approval. All that before your fob or fridge can transmit a tiny signal. In practice, many innovative devices never reach the market. The Big Four tend to approve only established partners whose devices fit their business plans, which is why we have yet to see all those wireless devices that were supposed to be in our future."
"The firms already control what phones or devices reach Americans; 95% of cell phones are sold by the wireless carriers themselves. They strictly control phone design, blocking features that might threaten their revenue, like timers that keep track of how many minutes you’ve used each month. The carriers have also crippled or blocked alternative means of connecting wirelessly, like Bluetooth and Wi-Fi, because they want you to burn up minutes on their networks and charge extra fees."