The 700MHz spectrum set to be auctioned by the Federal Communications Commission next January is some of the most highly sought after bandwidth to be made available in years. One major wireless player may be left on the outside looking in when the bidding begins, however, if Frontline Wireless has its way.
In a complaint (PDF) filed with the FCC late last week, Frontline accused Verizon of violating the FCC's lobbying rules. Frontline wants the FCC to impose sanctions on Verizon, up to and including being barred from bidding on the beachfront spectrum that will hopefully become home to a new wireless broadband network.
Frontline is upset about a September 17 meeting between Verizon, FCC Chairman Kevin Martin, the FCC's Wireless Bureau Chief, and a handful of other FCC staffers. After the meeting, Verizon filed an ex parte letter with the Commission that provided only a brief, one-sentence description of the event. Frontline calls the brief description an "arrogant violation" of the FCC's requirement that firmsdisclose the "summary of the substance" of their meetings with the FCC to other interested parties during ongoing proceedings (in this case, the rule-making process for the 700MHz auction).
The FCC later instructed Verizon to make a more detailed filing covering the substance of the discussions, which Verizon did on September 25 with an additional one-paragraph description. To no one's surprise, Verizon used the meeting to rehash its opposition to the open access rules adopted by the FCC for the spectrum auction. Indeed, Verizon has already sued the FCC in an attempt to get a federal court to overturn what the telecom describes as the "arbitrary" and "capricious" rules.
Like Verizon, Frontline didn't get what it wanted from the FCC during the rule-making process, either. The company had pitched a plan to the Commission under which the winner of the auction for 10MHz of the available spectrum would also be given half of the 24MHz spectrum allotted for public safety use. The company guaranteed it would build out the system within 10 years and promised it would reach 99 percent of all Americans.
Instead, the FCC decided to pair two separate 5MHz blocks (Block D) with larger blocks of spectrum already reserved for public safety use. Under the FCC's Public Safety/Private Partnership, the winning bidder(s) for the 5MHz blocks will need to build a national network good enough to meet coverage and redundancy requirements. The 10MHz public safety and 5MHz blocks can then be combined to operate a commercial network, but public safety traffic will get priority on the network.
White blocks indicate available 700MHz spectrum. Data source: FCC
Last week, Frontline asked the FCC to reconsider some of the rules, including what it described as the FCC's "capricious" $1.6 billion reserve prices for the 5MHz public safety blocks. The company also wants the likes of AT&T and Verizon barred from controlling more than 45MHz of the available spectrum in order to avoid "unacceptable anticompetitive effects."
Getting the FCC to bar Verizon from bidding in the upcoming auction would go a long way towards accomplishing Frontline's goal of keeping the large telecoms from monopolizing the spectrum. In the likely event that the FCC decides against preventing Verizon from bidding, Frontline helpfully attached a list of other possible sanctions, including fines and/or barring Verizon from further participation in the FCC's rule-making process.