Verizon challenges FCC's 700 MHz Auction rules in Court

Verizon Wireless, America’s largest wireless company and the largest wireless data provider, is suing the Federal Communications Commission (FCC) over 700 MHz open-access rules it passed for a coming radio spectrum auction.

In a filing to the U.S. Court of Appeals for the District of Columbia Circuit, Verizon Wireless, a joint venture of Verizon Communications and Vodafone, accused FCC of going beyond the limits of its authority in mandating carriers to open their networks to all devices and cellphone applications.

In its lawsuit filed Monday in the court, Verizon claims FCC action "violates the US Constitution, violates the Administrative Procedures Act.” The Basking Ridge, N.J.-based company sought to overturn rules, saying the rules are “arbitrary, capricious, unsupported by the substantial evidence and otherwise contrary to law."

The 700 MHz open-access rules according to the company would allow any device or software to work on a portion of wireless airwaves being auctioned by the government.

On Tuesday (September, 11), six years after the 9/11 terrorist attacks, the FCC issued regulatory guidelines to handle the auction of the 700 MHz band radio spectrum. The new rules are designed to make it easier to locate people calling the 911 emergency number from a cellphone.

The 700-MHz spectrum would be able to carry signals that have the capability to penetrate concrete and beam through walls and floors. Companies who have expressed an interest include telecom giants like AT&T and Verizon Communications (VZ) as well as Google, the Internet search company.

The auction would be conducted for the purpose of handling the recent upsurge in wireless communication. The auction itself is slated to happen sometime in January 2008, and is expected to raise as much as $15 billion for the U.S. Treasury. However, the lobbying has already begun.

Last month, the Commission attached open-access requirements to one of the spectrum blocks to be auctioned, the large, 22-megahertz Upper 700 MHz C Block, as part of its controversial 700 MHz decision.

FCC’s decision has shaken up the wireless industry. Whereas the Verizon Wireless is abruptly opposing Commission’s auction guidelines, the other high-tech companies like Google Inc. and eBay Inc.'s Internet phone unit, Skype, had been aggressively pushing the FCC to adopt the conditions.

"It's regrettable that Verizon has decided to use the court system to try to prevent consumers from having any choice of innovative services," Chris Sacca, Google's head of special initiatives, on Thursday wrote in the company's blog. "Once again, it is American consumers who lose from these tactics."

“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,” said Richard Whitt, Washington telecom and media counsel for Google.