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Former FCC Chair: iPhone Hindered By Network Limitations
[July 03, 2007]

Former FCC Chair: iPhone Hindered By Network Limitations

( Via Thomson Dialog NewsEdge) Comparing the newly released iPhone to a Ferrari forced to drive on dirt roads, former FCC chairman Reed Hundt today renewed his call for an nationwide open-access wireless broadband network that is independent -- i.e., not under the control of the major wireless carriers.

Speaking to reporters on a teleconference call, Hundt, who is co-founder and vice chairman of Frontline Wireless LLC, one of the companies planning to bid in the upcoming auction of 700MHz spectrum, said that the iPhone's huge popularity underscores the crying need for ubiquitous high-speed wireless coverage in the United States.

Pointing out that the iPhone works exclusively over AT&T's wireless network -- and that a mandatory two-year contract at $60 a month will end up costing more than three times the price of the device itself -- Hundt said, "No other consumer appliance in America comes bundled with mandatory service, at a price three times that of the device."

The iPhone runs over AT&T's EDGE network, which is considered "2.5G" and offers data speeds of around 100-140 Kbit/s. The national network Frontline is proposing would offer speeds 12 times that fast, according to Hundt.

The iPhone's runaway success -- Apple sold 500,000 of the new mobile devices through Sunday evening, according to Piper Jaffray research -- leads to an inevitable "two-fold epiphany," Hundt added. "No. 1, oh my gosh, we need a 4G wireless broadband network in the U.S. No. 2, we need it to be national, and low price, and provide a choice."

The war of words between Hundt and his Frontline colleagues and the major U.S. carriers plus their supporters has escalated in recent days as the FCC prepares to issue rules for the 700MHz auction. Considered the most important sell-off of wireless spectrum in a generation, the auction must take place by next January, according to Congress, as part of the transition to digital TV broadcasting. Backed by prominent Silicon Valley investors, including Netscape founder Jim Barksdale and John Doerr of venture capital firm Kleiner Perkins Caufield and Byers, Frontline plans to build a nationwide broadband network that would be available for public-safety use during emergencies and leased to commercial carriers at other times. To ensure that it can successfully compete against the major wireless carriers like AT&T and Verizon Wireless, Hundt's group has asked that a portion of the valuable spectrum be set aside in the auction for smaller players.

Earlier on Monday, a bipartisan group of 16 members of the House Energy & Commerce Committee issued a letter blistering the Frontline proposal, saying it amounts to rigging the auction and would "harm both the broader auction and our public safety goals."

Asked to respond, Hundt replied dryly, "I guessed they missed the weekend," when Americans lined up by the hundreds at AT&T and Apple stores to purchase iPhones.

"The policy [the congressmen and women] are advocating is to just sell all the spectrum to Verizon. That's not a solution to this problem."

Last week Frontline issued an open letter to Verizon Wireless in which it accused the No. 2 U.S. wireless carrier of is "hiring teams of surrogates to attack Frontline" and called for a public debate. "We invite Ivan Seidenberg, Verizon's CEO, to meet in Washington any one of Frontline's partners to debate the merits of Frontline's plan to build a national public-safety network versus Verizon's plan."

The Frontline plan was until recently considered a long-shot in Washington, D.C., but recent statements from FCC chairman Kevin Martin have indicated that he favors an auction that in general terms matches Frontline's proposal.

Copyright 2007 CMP Media LLC

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