Verizon Wireless to FCC: We’ll See You in Court Over 700MHz Spectrum Auction Rules

Verizon Wireless has appealed the Federal Communication Commission’s (FCC) rules for its upcoming 700MHz spectrum auction, charging the agency with overstepping its boundaries in requiring wireless carriers that purchase spectrum to open up their networks to any mobile device and any third-party application, according to The Wall Street Journal.

In late July, the FCC assigned “open access rules” to 22MHZ of the 60MHz to be auctioned off in January. The idea of such rules is to increase competition in the mobile broadband space by enticing new comers to bid on the spectrum, which has been called “beachfront property” because of its strong signal strength that can penetrate large buildings and other obstacles. The chunk of spectrum is also attractive to carriers because it’s the only time such spectrum will be available in the foreseeable future.

Verizon filed its appeal with the U.S. Court of Appeals for the District of Columbia, calling the FCC’s open access rules “arbitrary, capricious, unsupported by substantial evidence and otherwise contrary to the law,” according to the Journal.

It’s clear why Verizon would be displeased with the FCC’s decision to attach open-access rules to the spectrum, as it wants a piece of the 700MHz frequency but it doesn’t want to have to dole out the cash required to build a network that can support any device, as well as allow for any mobile phone application. What isn’t clear is why it thinks it can challenge the U.S. government’s decision, and it refused to comment when the Journal asked. The FCC is tasked with maintaining competition in the mobile communications space, and the open-access rules are meant to do just that. A number of consumer advocacy groups, like Public Knowledge and Consumers Union, had called for even more extensive open access rules that would’ve required spectrum owners to sell wholesale access to their networks to any interested party, but in the end the FCC decided against such rules. So the agency already met wireless carriers halfway.

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Prior to the FCC’s announcement that it would attach open access rules to the spectrum auction, Verizon said it would likely still bid if the FCC required that the network support any mobile device, but it wanted the ability to regulate which third-party applications could be employed.

Now Verizon appears to be throwing a temper tantrum because it didn’t get its way, but I’m not sure what the carrier hopes to accomplish. It’s also worth noting that Verizon’s playing with fire by appealing the FCC’s rules, as it works with the agency on various matters and that relationship could be hindered by the action.

Should carriers have more of a say in what they can and can’t do with the 700MHz spectrum? Or has a past lack of government oversight on such matters led to the current state of the mobile broadband space in the U.S., where the major players rules and others contenders drool?

The FCC’s decision seems reasonable enough to me, considering it could’ve included a wholesale access provision that would’ve sent many of today’s potential bidders running for the hills. Do you think the FCC should’ve included such provisions? Did the agency make the right decision? Or do you agree with Verizon that the FCC overstepped its bounds?