Will FCC's open access rule really make third pipe?

The Federal Communications Commission's open access plan for the 700 MHz band is drawing skeptics in the analyst community about whether the regulations will truly create the third broadband pipe. On a 22 megahertz regional spectrum block the agency imposed limited open-access requirements, enabling third-party devices and applications to connect to the wireless network so long as they cause no disruption to other communications.

Blair Levin with investment banking firm Stifel, Nicolaus & Co. Inc.: "We believe the key impact for investors is that there is unlikely to be a new national wireless carrier using the 700 MHz spectrum to compete with the telco and cable broadband incumbents, though we expect some potential new entrants to bid and make a significant effort."

Walter Piecyk at Pali Research states: "We don't think these rules will have any impact on the industry other than perhaps wasting a chunk of spectrum that Verizon could have used to provide higher bandwidth data services to its customers."

Piecyk makes some very poignant arguments against the FCC's ruling in a recent research note. If anything, he says, the open access requirement might provide existing operators with more justification for blocking applications on their networks since there is an "open access" alternative. He also questions the FCC's notion of increased competition through government regulation. That is, licensees will be forced to comply with open access regulations through significant enforcement mechanisms. You have to be skeptical about competition through government intervention.

For more about reactions to the 700 MHz auction rules:
- take a look at this article [1] from RCR Wireless News
For a detailed look at the auction rules:
- read this article [2] from FierceWireless