In a surprise move, Verizon has dropped its lawsuit challenging the open access requirement for next January's 700MHz spectrum auction. Earlier this week, the telecom filed a motion to voluntarily dismiss the case filed last month with the Court of Appeals for the DC Circuit. The motion for dismissal cites the court's decision to deny Verizon's request for an expedited review as the reason for dropping the case, as an unexpedited review is unlikely to be completed prior to the start of the auction.
The rules laid down by the Federal Communications Commission require the high bidder for the "C" band—a highly-desirable 22MHz chunk of spectrum—to allow any lawful device and any lawful application to use the spectrum. As a result, Verizon's current cellular model, which imposes restrictions on the devices and types of content that can be used on the network, won't fly.
When it sued the FCC to have the open access rules overturned, Verizon called the rules "arbitrary" and "capricious," saying that the mandate was "unsupported by substantial evidence and otherwise contrary to law." Verizon's challenge drew criticism not only from advocates of open access, but from some other companies that are expected to bid on the spectrum. Google was especially critical of Verizon, saying that the company didn't believe "consumers deserved more choice" than they currently have.
Other companies have voiced objections to the FCC's auction rules as well. AT&T has asked for clarification on the requirements for Block "D," a chunk of spectrum that would be used for both commercial wireless broadband and public safety access. Frontline, which wanted to run a public/private wireless network using the spectrum, has argued that the FCC's $1.6 billion reserve price for Block D is too high and that the auction rules would make it too easy for a big incumbent like AT&T or Verizon to snap up enough spectrum to result in "unacceptable anticompetitive effects."
Frontline has also attempted to have Verizon barred from participating in the auction for violating the FCC's lobbying rules, citing a September 17 meeting between Verizon, FCC Chairman Kevin Martin and some other FCC staffers. Under the FCC's rules, companies are supposed to submit ex parte filings disclosing the nature of these meetings; Frontline called Verizon's single-sentence filing an "arrogant violation" of the rules.
Needless to say, the FCC hasn't barred anyone from participating in the auction, and, earlier this month, the FCC released the final set of rules for the spectrum sell-off. Aside from bumping the auction back eight days to January 24, 2008, there were no changes of note. All that's left is to let the bidding begin and see which of the would-be bidders (including AT&T, Google, Verizon, and Frontline) step up to the auction block.