Carving Up The Wireless Spectrum
Monday, July 9, 2007
For Reed Hundt, iPhones couldn't have come along at a better time.
Consumers snapped them up last weekend, giving the former Federal Communications Commission chairman a chance to show what the country lacks: a nationwide network open to all mobile phones and other devices.
That kind of network is exactly what Hundt wants his latest venture, Frontline Wireless, to build, despite steep odds.
Using AT&T's wireless network, which is slow compared with other services, to power iPhones is "like inventing a Ferrari for a country of dirt roads," Hundt said last week. "We have a pokey, ancient network because we don't have a private company like Frontline forcing everyone to keep up."
Hundt, who led the FCC during the Clinton administration, is the vice chairman of Frontline. Frontline is one of several companies vying for a piece of the coveted spectrum will be auctioned off early next year after it is abandoned by television broadcasters as they move to digital programming. But Frontline's efforts face stiff competition from well-established and deep-pocketed telecom giants who have deployed armies of lobbyists on their behalf.
With his candid manner, the Chevy Chase consultant has spent the past six months trumpeting the benefits of his company's proposal, which he says would increase competitiveness in the wireless industry and create a nationwide network for police and firefighters.
At the FCC, Hundt made his mark by launching the first spectrum auction, in the mid-1990s. Now he is on the other side of the gavel as a contender for choice airwaves about to be auctioned. An adviser with McKinsey & Co. and a director on the board of Intel, Hundt brings both political and technological clout to his efforts to tweak the auction rules, now under consideration by commissioners.
Frontline is headquartered in Greensboro, N.C., where chief executive and wireless entrepreneur Haynes Griffin resides. The company's lobbying is led by Hundt from a small office in the District.
The spectrum that will be auctioned off is considered prime real estate for wireless broadband because it transmits signals through walls and across rural areas. As a result, phone and cable companies have a strong incentive to pay top dollar to secure as much spectrum as possible. Federal officials estimate the auction will yield as much as $20 billion.
Hundt and his partners at Frontline want to create a public-private partnership for a national network that would compete against AT&T and Verizon. In addition to operating commercially, the proposal would carve out a piece of spectrum to create a public safety network that would give priority to first responders in an emergency.
"This is biggest privatization of public property in history," he said. "We're asking the FCC to place conditions on the sale of the license, just like zoning on real estate."
He is the first to admit that it will be an uphill battle, but he's put together a heavy-hitting team of tech industry veterans to help promote -- and, more importantly, fund -- Frontline's prospective network. Among the backers are venture capitalists Ram Shriram, an early Google investor; Jim Barksdale, who was chief executive of Netscape; and L. John Doerr, who has led investments in such companies as Amazon and Symantec. The company says it has $3 billion in hand and is prepared to raise up to $10 billion more in the next five years.