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Verizon Wireless Challenges Spectrum Auction Rules

Telecom giant opposes "open access" conditions supported by Google

by Martin H. Bosworth
ConsumerAffairs.com

September 14, 2007

The telecom giant opposes the FCC's "open access" rules, which mandate that any suscriber can use any wireless handset with any network, and that consumers should be free to download any software they want from the network.

In a filing with the U.S. District Court of Appeals in Washington, D.C., Verizon charged that the rules adopted by the FCC exceeded the commission's authority, and were "arbitrary, capricious, unsupported by substantial evidence, and otherwise contrary to law."

The sparse filing did not detail Verizon's claims, and Verizon representatives did not provide further comment.

The "open access" conditions were part of a deal offered by Google, which promised to bid $4.6 billion in the spectrum auction if the FCC agreed to support principles for four types of open platforms to be used with the new spectrum.

When the FCC agreed to support only two of the four principles as rules for the auction, Google praised the decision and indicated it might bid in the auction nonetheless.

Google's Chris Sacca criticized Verizon's move on his company's public policy blog, saying that it was "regrettable that Verizon has decided to use the court system to try to prevent consumers from having any choice of innovative services."

"The nation's spectrum airwaves are not the birthright of any one company," said Sacca. "They are a unique and valuable public resource that belong to all Americans."

Net neutrality

The wireless spectrum auction represents a key front in the continuing battle over net neutrality, the principle that consumers should be free to access all content equally on the Internet without interference.

Major telecoms such as Verizon and AT&T wanted the auction to be held without any conditions, in the hopes that they would be the preeminent bidders and be free to buy up the spectrum for new services.

Consumer groups wanted the spectrum made available for entreprenurial companies to develop wireless broadband Internet networks--a fabled "third pipe" that would compete with existing cable and telecom Internet services.

Although the FCC's compromise rules fell short of the "third pipe" goal, they were still a significant step to challenging the wireless market's strict control over what software and systems consumers can use on their phone. Although both AT&T and Verizon staunchly opposed Google's "open access" platform, the tide turned when AT&T agreed to support the compromise rules championed by FCC chairman Kevin Martin.

Early termination

The FCC has also promised to investigate punitive "early termination fees" levied by wireless, cable, and Internet companies against subscribers who cancel their contracts early.

The move was spurred by legislation introduced in the Senate that would put an end to the fees and mandate clear disclosure of what fees companies can charge to consumers.

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