There is something noble and endearing, but also deeply suspicious, about the idea of free broadband for all, especially coming out of a society where people are denied the most basic human needs, such as decent medical care. Someone is trying to show they care, but perhaps only so much.
It is this ‘contradiction’ that lies at the heart of the FCC’s effort just announced for discussion to sell a license to 25 MHz of pretty decent spectrum, in the 2.1GHz range, to a company that must use 25% of the bandwidth to offer free services.
What would a free service look like exactly and who would it be free to? The FCC mandate appears to be targeting the ‘have nots’ in society, but also the ‘haves’ because one of the requirements is that there would be traffic filtering, to ensure that this kind of free public service broadband would not allow pornography or anything likely to offend families. It would be a kind of sub-internet, and be about as successful as government run TV stations are around the world.
Would the internet actually survive with censorship, or is censorship only ever there to be got around, just as it is in places like China, where government censorship denies the existence of happy societies outside of China, of homosexuality, of anything sexual and of criticism of the state. Darknets spring up all the time which defeat these objectives, and the same would happen to such a ‘free’ but controlled internet that the FCC is dreaming of.
Essentially this will not happen, not in any way shape or form that it has been conceived by the FCC. The license may be issued, but the value will be low, because only 75% of the capacity will be possible to monetize and this is less money with which to pay for the 95% US wide build out requirements that will go with it. The spectrum isn’t worth 75% of similar spectrum, it will be less than half.
And once you have such a network how do you police it. For instance if it offers free low speed, two way connections (down to 768 kbps downstream) then there will be a lot of applications that this is simply no good for, like sending video. So what if the operator offers some video services, which take up 75% of the network capacity, and then offer web browsing for free. Careful pricing of such a bundle might mean that it can prove that the FCC edicts on free access were met, but most customers might be paying for another service.
In other words the ideal would be circumvented by clever marketing and positioning. It would be like buying $50 seats on cheap airlines. Only one guy in the plane gets the $50 seat, the rest pay anywhere between $100 and $300, but they can still advertise a $50 flight, because at least one person gets that price. Same with free.
And what about devices? If this network has a single unbundled free service, it will need a device to connect to it. And since it will be a wireless service, it will be the people that have already got some kind of subsidized device deal from paying for another service that will have the device already, and who can utilize the free service. Which in a way, means that it is not free at all.
And however this operator creates a free service, it will be done so to the disadvantage of rivals. The service might be free, existing competitor network devices might work on it, but it will be created free in such a way that it pulls customers from other services, and these become customers that ‘might’ also buy the new operator’s paid services. That’s going to upset AT&T and Verizon and a few others.
In fact it is likely that only AT&T or Verizon could run such a service, and they might do it entirely to curry further favor with the FCC, or to ensure it does not cannibalize their existing wireless franchises.
Which is why all the AWS spectrum holders are saying that this is sure to ‘interfere’ with their spectrum, which is code for financially interfere with my business.
The plan came out of the idea floated some time ago by M2Z Networks to offer free wireless broadband service. The FCC said no when it was proposed in 2006, but since then the world has changed and Google has spread this vision of open networks and people just connecting willy-nilly to any network they fancy, and either paying the fees, accepting lots of advertising of accepting slower but free networks. The closest to the idea being tried are the disastrous muni wi-fi experiments driven by Google and Earthlink, which are now largely understood to have failed, even if muni wi-fi makes a comeback shortly without the word free attached to the business model.
In fact that’s an ideal model to return to with this idea. Local municipalities might well agree to pay (a low price) for all (most) of their broadband requirements, delivered over a wireless network, and then in return be happy to offer free local service to their community. The likely technology is the only sticking point in that the cheapest format for devices is likely to be wi-fi for web access, built into existing PCs and laptops.
Another interesting question has to be whether or not the FCC considers ad supported networks as ‘free,’ which might provide an alternative or additional model.
T-Mobile which plans to use neighboring spectrum to offer cellular and mobile broadband services is likely to be most upset by this, given that it spent $4.2 billion on its AWS spectrum. The auction may get past early objections about interference, and the spectrum may get sold, and a network built, but the outcome, in terms of a US wide free broadband service, is, in our view, unlikely to emerge.