IP Democracy: Silicon Valley Trio Aims for Nationwide Wireless Broadband

An ambitious and unorthodox proposal has been floated at the FCC by three Silicon Valley powerhouses to build a nationwide wireless broadband network. Kleiner Perkins Caufield & Byers, Charles River Ventures and Redpoint Ventures are financing a firm called M2Z Networks that would use spectrum being made available in upcoming wireless auctions to build a nationwide broadband wireless network.

“M2Z’s ultimate goal, through its own service, is to drive development of the broadband marketplace so that access is affordable and future penetration levels are near-ubiquitous throughout the country,” the company said in a filing with the Federal Communications Commission.

In a twist, however, M2Z is promising to offer free broadband service of 512 kbps download rates along with faster, premium broadband options. In another twist, M2Z is asking the government to let it buy the spectrum outside the usual bidding process — it promises to pay the U.S. Treasury 5% of its gross revenues from the premium broadband options.

The company, which says it has access to $400 million to build this network, is headed by John Muleta, former chief of the FCC’s wireless bureau, and broadband pioneer Milo Medin, who was key to the launch of cable high-speed consortium @Home.

Not everybody, however, is buying this vision. So many companies have tried to build national wireless broadband networks (anybody remember the costly flameouts of boom-era fixed wireless providers Teligent and Winstar?) and have failed miserably. Too much capital is required and too many years are needed to get the job done.

Moreover, M2Z would be building out into an increasingly competitive market dominated by powerful cable and phone companies, which also carry a lot of swack at the FCC.

Om says it succinctly

The blue-sky proposals such as this one, always make me queasy. It is easy to plan such massive scale networks, except when reality comes knocking. @Home comes to mind. What was the name of that ill-fated nationwide WiFi network backed by IBM, AT&T (the original), and a score of others.. Cometa was it?

Though earnest in its desire, the M2Z plan, is quite likely to be stuck in the quagmire called the Beltway. The spectrum owners - the wireless phone companies and others like Clearwire - would ensure that this plan doesn’t even get off the ground. Others who are planning to buy spectrum in a forthcoming auction would raise holy hell, if this deal was approved. But more importantly, the duopoly with its enormous clout in DC, is going to work hard to ensure that this remains a Silicon Valley dream.

Still, wouldn’t it be cool if M2Z managed to accomplish its goal? Wireless broadband access is such an iffy proposition, as any business traveler knows well. And, without quixotic ideas, big things don’t get done.

Update: Somehow I missed this in Om’s piece but Silicon Beat takes an even dimmer view of the venture. Calling M2Z a Hail Mary pass, Matt Marshall says:

Frankly, we find this a little bizarre, because of the competitors out there, and because ten years is a long time to plan in this industry, especially when telecom service is tending toward zero cost (look at Skype and Vonage blood battle over VoIP).

Posted by Cynthia Brumfield on May 18, 2006 8:17 AM to IP Democracy