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CONTACT: Amy Smorodin
May 18 , 2007
(202) 289-8928
Allocating the Electromagnetic Spectrum
Transcript Released of February Event on M2Z Proposal

WASHINGTON D.C. - As the deadline looms for the auction of spectrum being vacated by broadcasters, the debate continues on how best to allocate the resource. A pending proposal from M2Z Networks offers to provide certain public services, including free wireless broadband access to 95 percent of the U.S. population within ten years. Is such a proposal a viable alternative to auctions, and will it be an efficient way of increasing U.S. broadband penetration? In February, The Progress & Freedom Foundation hosted "Allocating the Electromagnetic Spectrum: A Discussion of the M2Z Proposal," where policy experts and affected parties debated this and related spectrum issues. Today, PFF is releasing a transcript of the event.

Thomas Lenard, PFF Acting President and Senior Fellow, served as moderator for the discussion panel. He framed the conversation, explaining that the M2Z proposal "has implications both for spectrum policy generally and for universal service policy, as well as implications for broadband polices."

The discussion began with John Muleta, Founder and CEO of M2Z Networks, explaining his company's proposal. Expressing the importance of broadband for economic growth, Muleta explained, "What M2Z has come up with is a network solution [for providing] free, filtered, family-friendly wireless broadband access to 95 percent of the population within ten years." Instead of acquiring the spectrum through auction, Muleta explained M2Z would "[p]ay 5 percent of our subscription based revenues, to lease the spectrum from the government, spectrum that there are no plans for." Muleta also explained the proposal allows for free access by public safety agencies.

Robert D. Atkinson, President of Information Technology and Innovation Foundation, raised various concerns about the proposal, including the goal of universal broadband service, whether the spectrum could be allocated more efficiently, and whether such a plan could be overly dependent on technologies that soon become obsolete. "It seems to me, the challenge in ten years is going to be how do we get everybody on 30 megabit networks or 50 megabit networks or 100 megabit networks, and I just don’t see wireless being a viable alternative in that time period," he said. "It’s not to say it’s not an alternative for some uses, but as a direct competitor of really high speeds, I am a little dubious."

Chris Guttman-McCabe, Vice President of Regulatory Affairs at CTIA - The Wireless Association echoed the previously raised concern of M2Z's wireless technology being outdated by the time the buildout schedule was completed. He also questioned the claims of a lack of broadband competition and slow buildout. "M2Z is not proposing that they're going to offer an alternative that will differ from the population buildout-based decisions of landline and cable; he's going to transit on those same networks. That's from [Muleta's] own proposal."

Lawrence J. White, Arthur E. Imperatore Professor of Entrepreneurial Studies and Deputy Chair of Economics at New York University, warned that the M2Z proposal would lead spectrum policy away from auctions and back to "command-and-control." Instead, White explained, a successful spectrum policy should focus, "on auctions, propertization, developing markets, developing property rights, bringing them to the center of the spectrum allocation process, encouraging economization of government's substantial slice of the spectrum pie as well."

Initial panel remarks and moderator questions were followed by a question and answer session. Complete statements from the panelists and questions from attendees can be found in the event transcript.

The Progress & Freedom Foundation is a market-oriented think tank that studies the digital revolution and its implications for public policy. It is a 501(c)(3) research & educational organization.



The Progress & Freedom Foundation