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Firm Seeks FCC Review of Free Internet-Service Plan - WSJ.com http://online.wsj.com/article_print/SB118720450065998722.html
August 16, 2007
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executive of the group said.
M2Z Networks Inc. issued a statement in which it said it would take the FCC to court in an attempt to
force the agency to conduct a thorough analysis of the plan before it determined whether it would back it.
The Menlo Park, Calif., company has proposed taking 25 megahertz of spectrum that is currently vacant
and using it to build a wireless broadband Internet network to provide free service to 95% of Americans
within a decade.
In addition to the backing of well-known Silicon Valley venture capitalists who count among their earlier
investments Amazon.com Inc., Netscape, Google Inc., social-networking site MySpace and TiVO Inc.,
the plan has the backing of a number of prominent lawmakers.
"Every American should have access to high-speed broadband Internet service," said Democratic Rep.
Anna Eshoo of California. "It's beyond me why the chairman of the FCC would be circulating an order
within the commission to kill the M2Z application."
According to John Muleta, a former head of the FCC's wireless bureau and now chief executive of M2Z,
the group was informed last week by FCC Chairman Kevin Martin's office that Mr. Martin had circulated
a proposed decision to the other four commissioners that would deny M2Z's plan. An official in another
commissioners' office confirmed that Mr. Martin had circulated a letter suggesting the plan be declined.
An FCC spokesman declined to comment.
In order for the M2Z plan to succeed, it would require the FCC to hand over 25 megahertz of spectrum,
which goes against a principle established a decade ago that the agency should sell off any spectrum in an
auction. In exchange for being given the spectrum, M2Z would return 5% of any gross revenue its
network derived to the U.S. Treasury. The company would then use that spectrum to construct a wireless
broadband network covering 95% of the U.S. population within 10 years.
The company would seek to gain a return on its investment by offering access to the network on a
wholesale basis. A group of high-tech companies including Google, Intel Corp., eBay Inc. and Yahoo
Inc. had lobbied the FCC to mandate that another swath of spectrum being sold early next year be
operated on a wholesale basis. The companies were ultimately unsuccessful in their campaign.
In March, CTIA, the wireless industry's Washington lobby group, urged the FCC in a filing to "move
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Firm Seeks FCC Review of Free Internet-Service Plan - WSJ.com http://online.wsj.com/article_print/SB118720450065998722.html
immediately to dismiss or deny M2Z's application." The group opposes the proposal because it said it
would circumvent the agency's auction process.
Write to Corey Boles at corey.boles@dowjones.com1
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