Cyren Call, M2Z Waiting on the FCC

New business plans by Cyren Call and M2Z Networks may both be addressed by regulators this month

September 8, 2006

3 Min Read
Cyren Call, M2Z Waiting on the FCC

Two novel wireless broadband business plans may get a look from the FCC as early as this month.

The first proposal, from Cyren Call Communications Corp. , asks Congress and the Federal Communications Commission (FCC) to set aside 30 MHz of wireless spectrum in the upper 700 MHz band to build a national emergency communications network. That spectrum is slated for auction early next year and, if sold, it could raise tens of billions of dollars in revenue for the U.S. Treasury. (See 700MHz Debate: Safety or Shopping? and Spectrum for Safety: Is There Enough? )

Another company – M2Z Networks Inc. – is also asking for free spectrum. But M2Z wants the FCC to give it permission to use the 2,155 MHz to 2,175 MHz band to build a nationwide wireless IP network. The network will be free, family-friendly, and built at M2Z’s own expense, not taxpayers’ or the government’s. (See Top Ten New Startups.)

According to observers close to the action, the Commission could take steps to make one or both of these plans a reality by mid to late September. Alternately, the Commission (and Congress) could squelch either or both deals.

Both proposals are bold, controversial, complex, and require government intervention. And each has its share of supporters and critics. But each plan has rather different goals in mind.

While Cyren Call’s proposal has the backing of several public safety groups, it would need congressional approval in addition to the FCC’s. What’s more, Cyren Call faces some weighty opponents, including the wireless industry’s most influential trade group and at least one powerful member of Congress.

Perhaps the most controversial aspect of Cyren Call’s deal is asking the government to halt an important pending auction. That has raised the hackles of the wireless industry. Steve Largent, president and CEO of CTIA , has said that implementing such a plan would “arrest the progress” Congress and industry have made in raising funds for the public sector. And House Subcommittee on Telecommunications and the Internet Chairman Fred Upton (R-Mich.) stated recently that he opposes Cyren Call’s proposal, saying it “threatens” plans already in place.

Verizon Wireless is also reportedly floating a plan to build a nationwide public safety network in the 700 MHz band. It’s unclear whether Verizon’s proposal flies in the face of Cyren Call’s or works in concert with it.

M2Z’s proposal, on the other hand, has received little public criticism either within the industry or the halls of government. However, some analysts are questioning the viability of its business plan. Tole Hart, an analyst at Gartner Inc. points out that the network may be slower than what most people are used to and it may rely on advertising to generate revenue, a serious consumer drawback. What’s more, Hart said, 20 MHz of spectrum may not be enough to build a nationwide IP network. And, he adds, the details of M2Z’s network buildout and customer service plans are fuzzy, at best.

The next steps are for the FCC to put the proposals out for public comment. Meanwhile, Congress could overwrite existing laws to allow Cyren Call’s plan to go through, though that seems unlikely. Lawmakers don’t need to act on M2Z’s proposal.

But the clock is ticking. According to John Melcher, Cyren Call’s chief spokesman, if the FCC doesn’t stop the upcoming auction and the spectrum gets sold, “an opportunity is lost forever.”

— Eric Glick, special to Light Reading

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