The Federal Communications Commission launched the highly anticipated public airwaves auction today. While the auction promises to bring about positive change in the broadband industry, some feel it is instead highlighting weaknesses in the areas of competition and innovation.

"The wireless industry is dominated by a handful of companies with a track record of stifling competition and an aversion to the innovation that open networks bring to the market," said Ben Scott, policy director of Free Press, in a Thursday statement.

"Putting the promise of the mobile Internet exclusively under their gatekeeper control is a chilling prospect. We need policies that open the closed networks of today and guarantee an open wireless Internet for future generations."

The FCC (News - Alert) felt the intense pressure last summer to focus attention on these airwaves as they could serve as the portal to allow increased competition and improved innovation into what some consider to be a stagnant wireless marketplace.

The agency’s response to this pressure was to open a portion of the “700 MHz” spectrum – made available as part of the digital television transition – to any device and any application.

"These conditions are a step forward -- but they only apply to a small slice of the public airwaves on a network that won't be available for years," said Timothy Karr, campaign director of Free Press, in Thursday’s statement.

"To put the mobile Internet in the pocket of every American, the FCC should open devices and applications on all wireless networks right now."

Although the announcement of the auction rules spurred reaction from companies such as Verizon (News - Alert) and AT&T who claimed that their networks were already open, the opposition – consisting of public interest groups and tech companies – don’t want to see the direction of the industry left up to the incumbents.

As a result, the coalition is urging the FCC to adopt rules that guarantee open devices and applications on all networks to provide more choices and greater innovation for all consumers. This movement is outlined in the “Skype Petition” which urges the FCC to enforce rules that are considered to be in favor of the consumer.

The 700 MHz spectrum has been long-coveted for its capacity to beam high-speed Internet signals through walls and other obstacles. This property was once considered to be a crucial element in creating a significant competitor to phone and cable companies that dominate 96 percent of the broadband market.

To the dismay of the public interest groups and tech companies, industry analysts are predicting that the incumbent wireless carriers are likely to win the top tier license in the auction.

"We've lost a huge opportunity if the 700 MHz auction fails to deliver new service providers to the wireless industry," said Scott. "It points to the urgent need to establish baseline consumer protections across the entire wireless industry that ensure competition and choice thrive in a world dominated by incumbents."

While this “doomsday” approach is taken by so-called public interest groups, is the public really hurting in the wake of this auction? Sure, AT&T (News - Alert) and Verizon may take the top tier wins in this auction, but given their current market share, these companies are doing something right to attract the level of business they currently enjoy.

Most likely, the opposition is more in favor of smaller companies that find it difficult, if not impossible to compete with these giants. If consumers overall really felt the pain associated with anything they are lacking, they should speak out with their buying power. Until that happens, these giants will continue to enjoy their position.

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Susan J. Campbell is a contributing editor for TMC and has also written for eastbiz.com. To see more of her articles, please visit Susan J. Campbell’s columnist page.

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