• Wall Street Journal , Wednesday, July 11, 2007 1:15 PM

Federal Communications Commission Chairman Kevin Martin on Tuesday confirmed that the organization would set aside nearly a third of the spectrum it will sell in a $15 billion auction for the creation of an "open" nationwide wireless network. The mandate, part of the FCC's draft rules for the auction, is seen as a big win for Web giants like Google and eBay, which have clamored for the creation of a network free from the constraints imposed by large telecom operators like AT&T and Verizon.

An open network would allow a new entrant into the wireless market that could, as Google argues, spur innovation in the nascent mobile wireless field. The likes of AT&T and Sprint Nextel operate closed networks, which they maintain close control over, limiting the Web experience of the end user, while "locking" phones made by certain manufacturers to a given carrier. AT&T's exclusive arrangement with Apple's iPhone is one example. The carriers are afraid that opening their networks would place too much power in the hands of content providers and handset makers. Of course it would, but it would also spur innovation, and -- worryingly for the carriers -- the use of low-cost VoIP services like Skype over mobile networks.

Therefore, it's no surprise that the big telecoms adamantly oppose the decision, as Google and other tech firms applaud it. However, proponents worry that the proposed FCC rule doesn't go far enough to ensure that a new operator with an open network will enter the market. Who will win that auction? Insiders say Google is unlikely to bid directly for the open spectrum as it would require spending billions on building out and operating a wireless network.

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