Thanks to jealousy and crybaby antics by Verizon, the FCC’s auction, set to be held next year, for the prized block of spectrum might be pushed back. Several early reports are calling this new lawsuit the first shot in what is sure to be a long legal battle. Now with the papers filed, the auction for more than a thousand wireless licenses are surrounded in a cloud of doubt.
RCR Wireless news broke the story late Thursday, when they posted some of the legal documents in their story. Verizon says the FCC’s auction, “violates the U.S. Constitution, violates the Administrative Procedures Act … and is arbitrary, capricious, unsupported by the substantial evidence and otherwise contrary to law.”
The move for a lawsuit comes just over a month after the FCC approved open access rules for the auction, which requires winning bidders to allow open and unrestricted access to the spectrum. Originally, AT&T and Verizon were against the open access rules, but late last month AT&T switched their views and publicly backed FCC Chairman Kevin Martin and his proposal for open access.
Most comments and criticisms of this story point to the same thing; Verizon does not want to lose their grip on the consumer wireless market. The neutrality issue is a strong case here; companies like AT&T and Verizon lock subscribers into contracts, and services that block access to other things. The best example of this is Verizon’s VCast, which offers online content but only from approved Verizon partners. No one on the Verizon network can access and use content offered by AT&T and Sprint. The FCC’s rules would require that type of open access and that would mean a potential loss of millions of dollars in revenue for the wireless companies as they are today. Simply, they do not want to change, regardless of public opinion.
Speaking out, Richard Whitt, Washington telecom and media counsel for Google said, “The nation's spectrum airwaves are not the birthright of any one company. They are a unique and valuable public resource that belongs to all Americans. The FCC's auction rules are designed to allow U.S. consumers—for the first time—to use their handsets with any network they desire, and download and use the lawful software applications of their choice. It's regrettable that Verizon has decided to use the court system to try to prevent consumers from having any choice of innovative services. Once again, it is American consumers who lose from these tactics.”
Frontline Wireless said in a statement, “Verizon’s lawsuit throws a wrench into the auction to promote competition and innovation for consumers through open access and give public safety an interoperable, national network. Verizon is challenging the FCC for doing what Congress required it to do in the first place—ensure that auction policy is guided solely by the public interest,” adding that it was ironic that Verizon, “would file this challenge because, under anti-trust precedent, it would not be able to hold this spectrum.”
Verizon has stated publicly that the “brief will speak for itself” and has issued no official comments on the suit or the negative public opinion on the matter. Free Press, a media reform group that has long supported the open access rules brought by the FCC and supported ventures similar in the past said Verizon is sending “lawyers, FUD and money” in an attempt to overturn the FCC’s decision.
The negative impact this could have on Verizion has been glossed over in the coverage of the suit. Consumers have long wanted open access and more content free of hidden fees and costs. The lawsuit, if it slows or even delays the FCC’s planned auction, can mean the loss of millions of customers who simply want to leave a network ran by monopolists.
“Verizon is wrong here and the FCC should be upheld. For too long they and some of the other big players (but mainly VZ) have tried to dominate by overly restrictive rules and burdensome technology. The marketplace should be won by premiere service, quality products and innovation, not by lockdown and intimidation. If you produce a service or product to be used on the network or phone, they should allow it (if it is within legal content issues, minding the DMCA), not by disabling them. Time for real competition by fair means,” reads one online post about the issue, mirroring the sentiment held my many others online.
There is no set trial date in the case and likely, there will be no initial hearing until later this month or early October.
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