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That was quick: FCC sets rules for spectrum auction

Lots of quality news today. So let’s start with our favorite bit: the rules for the impending wireless spectrum auction have been leaked. And guess what? It’s going to throw the major carriers into a tizzy. That’s right, the rules for the auction will require that more than a third of the 60 MHz spectrum be available for open access. That is, it cannot be used for locked devices, such as the ones your wireless carrier sells you every day. As Johnny Drama would say: Victory!

The victory is actually a bit surprising, since many believed that since wireless companies have strong lobbying presences in Washington, the FCC would cave to their demandsrequests. The actual outcome, though, favors the ever-expanding Google.

There hasn’t yet been an official reaction from the major carriers involved, AT&T and Verizon. That’s probably because the rules haven’t been officially announced — and may not be until late this month or early next month. One has to figure, though, that their PR departments are preparing scathing indictments of the FCC.

Why are the major carriers opposed to this? Simply, because they make a ton of money by selling you locked devices. When you sign up with Verizon, you can’t drag just any phone along with you; you have to buy one of their phones. Same with AT&T — though unlocking is an option because they are GSM-based.

Another reason is this:

These companies, and particularly Verizon Wireless, have fiercely resisted the notion that having invested in the construction of a broadband network, they would have to cede control over the types of devices or applications that are used on it.

From a business standpoint, we understand this. They have the network, so they set the rules for it. Kinda like you having a car and making a rule that no one can eat in it. But from a consumer standpoint, we’d like to tell Verizon and AT&T to kiss off. We don’t want your locked devices; we want to be able to ditch you if we find your service poor, or if we find a better service elsewhere.

The open access requirement would really open roads for content developers, which is why Google is said to be at the forefront of the movement. When service providers own the access to the airwaves, they can push their own content and suppress that from third parties. But with open access, companies like Google and Yahoo can more easily reach customers with their content.

Once again, the auction probably won’t begin until January 2008, and the results won’t be known until about six months after that, so we’re looking at a year before we know what’s going on with it. But we feel it’s an important issue. Open access puts power back in the hands of the consumer. And really, that’s where the power should be.

[CNN Money]