FCC rejects startup's plan to pay for spectrum with royalties

How does a broadband wireless network covering 95 percent of the Americas sound? M2Z Networks claims that's what it would have created if the Federal Communications Commission hadn't failed to even consider its plan, according to InfoWorld.

The startup says it may sue the government as a result of the FCC's failure to rule on its plan within a year and to consider its supporting documents, both requirements under the law.

M2Z had asked to use the spectrum between 2155MHz and 2175MHz, which has been set aside for "advanced wireless services" since 2000, and to pay for it with a 5 percent royalty payment to the government, no money down. The FCC has yet to decide on how to use the spectrum.

In its order rejecting M2Z's plan, the FCC said, "the public interest is best served by first seeking public comment on how the band should be used and licensed." The order turned down M2Z's plan "without prejudice," meaning it didn't stop the company from proposing it again.

M2Z's erstwhile plan: a free services, supported by locally targeted search advertising, at 384Kbps downstream and 128Kbps upstream. It would be "family friendly" -- that is, filtered of material inappropriate for children. Users could pay for the service and get a faster, unfiltered Internet.

Even if M2Z's plan never gets approved, it will have "singele-handedly shifted the debate," said Sascha Meinrath, research director for the Wireless Future program at the public policy group New America Foundation.

Its plan to pay for spectrum through royalties rather than up front, as well as to make more efficient use of spectrum and offer a free service, are likely to show up in future spectrum allocation plans, he said. More efficient wireless networks should mean more bandwidth at lower cost -- a better deal for consumers, Meinrath said.