In a surprise move, Verizon has dropped its lawsuit challenging the open access request for next January’s 700MHz spectrum auction. Earlier this week, the telecom filed to voluntarily dismiss the lawsuit it filed last month with the Court of Appeals for the D.C. Circuit. The motion for dismissal cites the court’s decision to deny Verizon’s request for an expedited review as the reason for dropping the case, as the impromptu review is unlikely to be completed before the start of the auction.
The rules set by the Federal Communications Commission require a high bidder for the “C” band—the much-loved 22MHz chunk—to allow any legitimate device and equipment to use the spectrum. As a result, Verizon’s current cellular model, which places restrictions on the devices and types of content that can be used on the network, won’t fly.
When it sued the FCC to have the open access rules changed, Verizon called the rules “arbitrary” and “forceful,” saying the order was “unsupported by substantial evidence and otherwise unconstitutional.” Verizon’s challenge drew criticism not only from advocates of open access, but from other companies hoping to command the spectacle. Google is particularly critical of Verizon, saying the company doesn’t believe “consumers deserve more choice” than they currently have.
Other companies have voiced objections to the FCC’s marketing rules as well. AT&T has asked for clarification on requirements for Block “D,” a block of spectrum that will be used for both commercial wireless bandwidth and public security access. Frontline, which wants to operate a public/private wireless network using spectrum, has argued that the FCC’s $1.6 billion reserve price for Block D is too high and that the auction rules would make it too easy for a large operator like AT&T or Verizon to snap up the spectrum to result in “unacceptable anticompetitive effects.”
Frontline has also tried to prevent Verizon from participating in the auction for violating FCC lobbying rules, citing a September 17 meeting between Verizon, FCC Chairman Kevin Martin and some other FCC officials. Under FCC rules, companies must submit ex parte records describing such meetings; Frontline called Verizon’s single-sentence filing an “arrogant violation” of the law.
Needless to say, the FCC did not prevent anyone from participating in the auction, and earlier this month, the FCC released a set of final rules for the auction. Apart from bumping sales back eight days to January 24, 2008, there was no change of note. All that remains is to let the bidding begin and see which bidders (including AT&T, Google, Verizon, and Frontline) step up to the auction block.