"We need to reserve some spectrum for free broadband services," FCC Chairman Kevin Martin said. "This would be a lifeline broadband service that would be designed for lower-income people who may not otherwise have access to the Internet."

T-Mobile had warned that the FCC's proposed launch of an advanced wireless service (AWS) in the 2155-MHz to 2180-MHz band would interfere with the 3G wireless services it operates in an adjacent slice of the spectrum. However, lab tests conducted last month demonstrated that devices operating at FCC-designated power levels would not present "a significant risk of harmful interference," the commission said.

Open Devices

Several aspects of the FCC's AWS proposal owe their origin to an application submitted two years ago by M2Z Networks, which envisioned earning money primarily by offering a premium wireless Internet service operating at speeds of up to three megabits per second. However, the Arlington, Va.-based startup also proposed to provide a free lower-speed service that would pay for itself by generating advertising revenue.

The FCC now says that the ultimate winner of its AWS spectrum auction must use up to 25 percent of its capacity to provide free, two-way broadband Internet service at data rates of at least 768 kilobits per second in the downstream direction. Moreover, the commission has embraced M2Z's call for the use of a network-based filtering mechanism to block Web content deemed unsuitable for children.

The winning spectrum bidder will be required to provide signal coverage and offer service into at least 50 percent of the total United States within four years, and to at least 95 percent of the U.S. population by the end of the 10-year license term. Moreover, the FCC is mandating that the provider of free Internet service allow consumers to use open devices on the network.

Economic Impact

AWS is just one example of the ways in which the FCC is hoping to foster a nationwide broadband connectivity boost. The FCC is also currently considering approval of a plan to allow the so-called "white spaces" between TV channels to be used for the launch of wireless broadband on a nationwide basis.

"Adopting a national policy to stimulate the deployment of broadband in underserved areas of the nation could have dramatic and far-reaching economic impacts," say the authors of a recent study by the nonprofit Connected Nation. Among other things, the group concludes that the acceleration of broadband coverage could generate a positive economic impact amounting to $134 billion per year, including the $92 billion expected to come from 2.4 million jobs it would create or save on an annual basis.

Still, the wireless and broadcast establishments remain wary about potential interference issues and are likely to view any FCC action that impairs or diminishes their ability to use the spectrum they have purchased as a "decisive breach " of the commission's contractual obligations. "Auction winners would have a legal right to seek money damages against the commission for that breach," T-Mobile counsel Lynn Charytan said.

However, Martin said the FCC's proposed standards of protection are "at least as strong" as the standards it uses to auction off any other spectrum. To prevent interference, the FCC chairman said, "the standards are actually going to be tougher."