FCC Election Day vote could revolutionize wireless

Most people on Tuesday will likely have their eyes glued to their favorite Internet site or TV station looking for information about the historic presidential race. But another very important vote will be taking place at the Federal Communications Commission--a vote that some say could set a course of massive innovation in wireless broadband services.

On Tuesday, the FCC is set to vote on a proposal that will open up between 300MHz and 400MHz of unused spectrum throughout the country for unlicensed use. This spectrum, known as "white spaces," sits between broadcast TV channels. Today, this spectrum, which is sometimes used for wireless microphones, is mostly left vacant as a buffer to make sure there isn't interference between TV broadcasters.

Technology companies have been lobbying for more than two years to open this valuable spectrum for unlicensed use. They believe this spectrum, which is ideal for sending data wirelessly over long distances and penetrating through walls, can be used to enhance or create new wireless broadband services. And they say they can develop products and services that use this spectrum without interfering with services running on licensed spectrum in adjacent bands.

But incumbent spectrum license holders, such as TV broadcasters, say wireless devices that access this unlicensed spectrum will cause interference. And performers, church organizations, and sports leagues, which use wireless microphones, say that these new devices will be unable to adequately detect when this spectrum is already in use, causing interference.

The issue, which will come to a head on Election Day, has stirred up deep divisions pitting technology companies like Google and Microsoft against old guard TV broadcasters and even performers, such as Dolly Parton.

Despite efforts led by the National Broadcasters Association and others, it looks like the FCC, which had tested several proof-of-concept devices this summer, will likely support overwhelmingly the proposal to open up the "white spaces." While no one other than the five FCC commissioners has seen the proposal that was put together by Chairman Kevin Martin, insiders say that the commissioners feel it adequately addresses interference concerns that broadcasters and wireless microphone users have.

The lessons of Wi-Fi and Bluetooth
Companies like Google and Microsoft believe this spectrum could spur a major era of innovation around wireless products and services, essentially doing for wireless broadband what other unlicensed spectrum has done for short-range wireless technologies like Wi-Fi and Bluetooth.

Similar interference issues were a concern when the FCC was considering the use of Wi-Fi and Bluetooth devices. And "white space" supporters, such as Google co-founder Larry Page, pointed out earlier this year on a lobbying mission in Washington, D.C. that radio frequency engineers were been able to work through those issues.

The result has been an explosion in the use of Wi-Fi and Bluetooth technology. Millions of people throughout the world have used Wi-Fi routers to extend their broadband connections to create home networks. Almost every laptop shipped today has Wi-Fi embedded as a standard feature, and a growing number of portable devices like cell phones are also coming with Wi-Fi.

What's more, millions of people have also used Bluetooth-enabled devices like wireless headsets and other cell phone accessories.

Because the spectrum used to create these products is free, it's easier and cheaper for companies of any size to develop hardware or software applications that use the wireless spectrum. It also means that consumers can use the services for free.

Wireless operators are already starting to position themselves for the next generation of wireless. Sprint is building its 4G WiMax network. AT&T and Verizon Wireless have committed to using a 4G technology called LTE.

Both of these technologies use licensed spectrum. Verizon will be using spectrum it won in the FCC's 700MHz spectrum to build the service. And even though wireless carriers have talked in broad terms about new business models emerging for this next generation of wireless, it's unlikely the service will ever be free. And it's quite likely it could be at least as expensive as today's wireless service.

Technology companies hope that opening up "white spaces" will allow new players to enter the market to create services with different business models. For example, free access to spectrum could allow providers to offer service for free or at least at a much reduced price. This could potentially put competitive pricing pressure on traditional wireless carriers and force prices lower. And as more video is distributed via broadband, it could create entirely new services for viewing movies and TV shows.

Also on the agenda
Aside from "white spaces", the FCC is also considering other issues during Tuesday's meeting, including two announced mergers in the wireless market.

Verizon Wireless is seeking approval to buy Alltel for $5.9 billion plus the assumption of $22.2 billion in debt. Verizon won approval for the deal from the U.S. Department of Justice last week.

The FCC is also expected to approve the merger, which will make Verizon Wireless the largest wireless operator in the U.S. But like the U.S. Justice Department, which is requiring Verizon to sell off assets in 22 states, the FCC is also expected to put conditions on the merger.

The FCC is also expected to approve a deal to merge wireless spectrum from Sprint Nextel with spectrum allocated to a company called Clearwire. The companies plan to use the spectrum to build a nationwide broadband wireless network using a technology called WiMax. Google, Intel, Comcast, and Time Warner Cable have joined forces to invest billions into the $14.6 billion venture, which will be called Clearwire.

Meanwhile, another controversial issue on the FCC's agenda has been put on hold. Late Monday, Chairman Martin pulled an item that would have overhauled how phone companies pay each other for carrying long-distance traffic. The measure, which was criticized by consumer groups for potentially raising the cost of phone service, also would have dealt with reforming the Universal Service Fund, which subsidizes phone service in rural parts of the country. These issues are expected to be at least discussed, if not voted on, at the FCC's December 18 meeting.