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July 9, 2007

The controversy on the Frontline

Posted by Tricia Duryee at 10:42 AM

The FCC is expected to announce shortly when an auction will be held to sell a band of wireless spectrum (700 Mhz) to be used for high-speed Internet access.

This auction has been quite controversial. The Washington Post has a good summary today on what the stakes are and who's involved.

Basically, the company causing all the stir is Frontline Wireless, led by Reed Hundt, who was FCC chief during the Clinton administration.

According to the Post, this is Frontline's proposition in a nutshell:

Hundt and his partners at Frontline want to create a public-private partnership for a national network that would compete against AT&T and Verizon. In addition to operating commercially, the proposal would carve out a piece of spectrum to create a public safety network that would give priority to first responders in an emergency.

On Frontline's side are Internet properties, such as Google. Opposing Frontline, are big telecom companies AT&T and Verizon.

Frontline argues that because wireless networks are owned by AT&T, Verizon and other giants, they stifle competition. Entrepreneurs can't easily get their applications and equipment to run on them and, because of this, they are inherently slower to develop.

The story also says Frontline already has $3 billion on hand, but claims it can raise up to $10 billion to purchase spectrum. Investors include former Netscape chief Jim Barksdale and big-name venture capitalist John Doerr.

The interesting thing is, although it may only be AT&T and Verizon who are raising a cry over Frontline's proposal, other companies have a big interest in the issue.

Kirkland-based Clearwire is building out a high-speed wireless network based on WiMax, as is Sprint Nextel. And T-Mobile USA, which has been slow to build out a speedier network, just gained enough licenses to do so last year.

All of these companies have invested millions, if not billions, in creating wireless networks.

Clearwire has not publicly said how it stands on the issue, but it and all of the parties have a lot at stake.

I'm sure there will be much more on this issue in the next few weeks.

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Tricia Duryee
Tricia Duryee
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Angel Gonzalez
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