April 3 – FCC Commissioner Kevin Martin announced (.pdf) recently that the Commission would not adopt Skype’s (an ebay company) request for open access requirements on 700-megahertz C block spectrum licenses. The C block licenses will be used primarily for next-generation wireless services.

Traditionally, certain cellular companies are permitted to block programs from being downloaded and used on their network’s phones. For example, T-Mobile generally does not allow customers to use an independent music downloading device or a third party web browser on certain phones, despite the phone having the capability to handle the application. Companies want users to have to use their download products, which increases the cellular company’s revenue. Essentially, Skype wanted the FCC to mandate that any cell phone companies using the C Block spectrum would be prohibited from excluding services, such as Skype’s voice over internet protocol (VOIP) technologies, on all of their mobile devices. Mobile users could place phone calls using Skype over the Internet rather than the cell company’s voice network technology.

Skype claimed that such a requirement would further the competition in the mobile industry for voice phone call technologies. The FCC denied this claim, based on the already existing open-access requirements on the C Block licenses.

First, in the Summer of 2007, the FCC required that certain C Block licenses allow for open network functions: licensees cannot charge extra for applications from third party developers (including ring tones and mp3 playback) and cannot deny use of applications solely because they require more bandwidth, such as Google Maps and likely Skype (list not exclusive). Second, Verizon Wireless voluntarily agreed in November to open up network access by the end of 2008. Third, Sprint and Google’s open handset alliance demonstrated efforts that mobile phone companies are making efforts to open up network access, rather than discriminate against third party applications and services.

Various critics wondered whether this petition was in the public interest or completely self-serving. Skype knew when filing the petition that these commitments to open network access were publicly made and would be available within the near future. Undoubtedly, promoting competition would be better than not. But, when the expense of this competition is more government regulation in the face of such redundancy, it might be worth it to save the petition and the company’s credibility.

Skype should have waited to see if the open access commitments failed to work out properly. For example, recent reports have surfaced that Verizon’s petition for open network access may not be as “open” as they originally let the public believe. If complications arise in the future with this petition, Skype could point to this failure of the market moving towards open access and as further justification for its petition. This evidence would give Skype much more leverage with the FCC that their request is legitimate. Skype’s premature action, however, may have burned a bridge before even crossing it.

The New York Times reports here.

Skype’s request for public support is here.

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Feb. 6 – AT&T officially announced plans to implement a nationwide 3G
wireless network in an effort to “cast a wider net for mobile customers this year.” This announcement comes on the heels of the FCC approving AT&T’s purchase 12 mhz of the 700-mhz nationwide spectrum for a cost of $2.5 billion. This portion is not part of the FCC auction currently in progress.

This news seems to be marginal in light of current events at the FCC. While this announcement paves the way for AT&T to establish the infrastructure for the eagerly-anticipated 3G iphone, the 700-mhz auction currently in progress deserves strict attention with respect to the future of 3G wireless networks (click here for the auctions current status). It is important not to lose sight of the 3G’s big-picture development.

The 3G iphone will help undoubtedly help AT&T’s push into the third-generation wireless market. There are many players, however, on the verge of entering the lucrative and innovative field. New market entrants hope to shake up traditional business models, including that of AT&T. For example, Google’s commitment of $4+ billion to a portion of the open-network portion of the C-Block, coupled with commitments to an open-platform cellular operating system, could quickly drive the direction of 3G wireless services.

This is not to ignore the partnership between Apple and AT&T and its effect on the smart phone/wireless broadband market. They have contributed substantial improvement and awareness to future wireless capabilities. This is not to say, however, that this partnership will swallow the 3G wireless movement whole. We have yet to see what companies, such as Verizon and Sprint, have planned to attempt dominance in the wireless market. Stay tuned.