Bipartisan members of Congress spoke out Wednesday to free the iPhone and other next generation hand-held computers from the grip of phone incumbent like AT&T and Verizon.

During the hearing of the House Subcommittee on Telecommunications and the Internet, representatives from both sides of the aisle called for a more open wireless system where new innovations aren’t held hostage to the competition-killing carriers that control the network.

Users ‘Trapped’

In what’s been dubbed the “iPhone hearing” Chairman Ed Markey (D-Mass.) and “Chip” Pickering (R-Miss.) called for a different system – where wholesalers could compete and new applications and devices could be connected regardless of carrier.

“The iPhone highlights both the promise and the problems with the wireless industry today,” Rep. Markey said holding up before other members his newly acquired iPhone. “On the one hand, it demonstrates the sheer brilliance and wizardry of wireless engineering. On the other hand, the advent of the iPhone raises questions about the fact that a consumer can’t use this phone with other wireless carriers.”

Markey highlighted myriad problems with our wireless marketplace, where “many consumers feel trapped having bought an expensive device or having been locked into a long-term contract with significant penalties for switching.”

Representative Pickering called for more openness in the marketplace stating that “openness is creating a wholesale market” for competition between services.

“Openness is creating interoperability for devices so that you can use a device, whether it’s an iPhone or another device, with whatever function you choose,” the Mississippi Republican said. “If you want to go to a Wi-Fi or WiMax spot and use it, or if you want to have the access to other networks, you can do so. That’s openness in wholesale.”

‘Calcified’ Markets

Markey and Pickering spoke about the current dilemma in America’s wireless system. The iPhone is shackled to AT&T and won’t work on any other network. The reason? We have allowed carriers to exert almost complete gatekeeper control over all devices, services and content in the wireless sector.

This has left the U.S. generations behind other nations, a failure that prompted New York Times blogger David Pogue to call American carriers “calcified, conservative and way behind their European and Asian counterparts.”

Regulations That Work

“I’m a small business owner. I don’t like regulators,” Jason Devitt, co-Founder and CEO of Skydeck testified during the hearing.

“In the context of wireless spectrum I do not have a choice between no regulations and regulations. We have a choice between badly written regulations and regulations that work.”

‘Mad as Hell’

Devitt continues:

“[I] flew here from Silicon Valley to tell you that we have a regulatory system that doesn’t work and the only way we’re going to fix it is if you have some form of open access …

“I am an entrepreneur and I am mad as hell that I require permission to innovate in the wireless market. I don’t have to go to the great companies that built our public highways and ask them for their views for what kind of cars I can put on those roads…

“For some reason I have never been able to understand, I have to ask permission of Verizon Wireless to attach a computer or the computers that they now call phones to their wireless networks and I have to ask their permission to run applications and services on those phones.”

DeWitt told representatives that we can fix the problem through open access regulation. “By open access, essentially it’s what Mr. Pickering said, it is the opportunity to attach any device to the network. It is the opportunity to run any service on the network.”

Spectrum Oligopoly

Professor Tim Wu of Columbia University testified that there’s “something weird” about America’s wireless market.

“It’s not like consumer electronics or software markets. It’s not like the Internet,” he said comparing the current wireless market to the old vestiges of the AT&T monopoly model. “It’s that model which has failed us.”

Professor Wu said that the one area that America has not been a technical leader is in the wireless space. “We have allowed one way or another there to be a spectrum-based oligopoly in wireless that has controlled innovation,” he said. “This Congress and the FCC has a duty to set us back to a direction towards and open market.”

Wu recommended that the U.S. implement wireless Carterphone principles and create an open access standard across the spectrum so that the next iPhone isn’t held captive by a locked system.

Our Last, Best Chance for an Open Network

These concerns echo actions by the SavetheInternet.com Coalition to open the upcoming government auction of valuable radio spectrum.

In May, Free Press, Consumers Union, Public Knowledge, Media Access Project and others called upon the FCC to implement an “open access” model that included Net Neutrality conditions for content and applications and permitted third parties to access the network as wholesalers and provide a wide variety of wireless broadband services, devices and access alternatives.

In June, more than a quarter million SavetheInternet.com supporters put the FCC on the spot when they flooded the agency with comments and urged Chairman Kevin Martin to open these airwaves to wholesalers and Net Neutrality.

The upcoming auction has moved the debate over open networks and Net Neutrality to the wireless industry where carriers exert multiple layers of control over services, applications, devices and content. Their stranglehold on wireless has chilled innovation across the sector while shackling cell-phone users to pricey contracts, phones and termination fees — severely limiting choice across the market

The airwaves on the block are frequencies being vacated by television broadcasters as they switch to digital signals. The auction is our last, great chance to create a “third pipe” for Internet access in a wired line marketplace that is controlled by many of the same companies that hold the wireless market in their grip.

Join the Fight

Coalition groups such as Consumers Union, Media Access Project, Free Press and Public Knowledge are fighting for both wireless and wired line freedom in the broadest sense.

In the wireless world this includes the freedom to use any device on any network, the freedom to choose among competing providers and the freedom to access any content or services without gatekeeper interference.

Imagine our surprise this morning when we read that FCC Chairman Kevin Martin wants to transform the 700MHz band into a “truly open broadband network.”

In articles seeded in both USA Today and Wall Street Journal, Martin indicated that he’s siding with consumers to bring real openness, choice and innovation to the wireless world.

Former AT&T boss Ed Whitacre chats up Martin

If true, this new position would mark a seismic shift for the chairman, who has sided routinely with the phone and cable cartel that controls wireless and wired Internet access for most Americans — and against popular public positions on Net Neutrality and “open access.”

But appearances can be deceiving.

“Whoever wins this spectrum has to provide … truly open broadband network,” Martin told USA Today Monday night, “one that will open the door to a lot of innovative services for consumers.”

According to Martin this means “you can use any wireless device and download any mobile broadband application, with no restrictions.” You know what they say about things that sound to good to be true.

Has the Public Message Finally Gotten Through?

In June, more than a quarter million SavetheInternet.com supporters put the chairman on the spot when they flooded the FCC with comments and urged Martin to open these airwaves to wholesalers and Net Neutrality.

On the surface, it appears that Martin has heard these concerns, abandoned his cozy relationship with the phone companies and sided with the public on behalf of an open Internet.

Upon closer inspection, however, Martin’s “plan” raises reasonable doubts.

Martin is reportedly going to circulate his “open access” proposal at the agency later today. But according to experts I spoke with today, Martin’s version of “open access” falls far short of the ideal.

Martin Spins ‘Open Access’

In May, Free Press, Consumers Union, Public Knowledge, Media Access Project and others called upon the FCC to implement an “open access” model that included Net Neutrality conditions for content and applications and permitted third parties to access the network as wholesalers and provide a wide variety of wireless broadband services and access alternatives.

Our open access model would foster new and non-discriminatory high-speed wireless services to compete head-to-head with the telephone companies. It would open up the network so the next generation of iPhones won’t have to kowtow to the likes of AT&T, Sprint and Verizon — companies that now seek to “cripple” any functions that compete with their entrenched business interests. True open access would allow the next Google or small company with the next big idea to offer its services on a level playing field – unencumbered by these gatekeepers.

Martin’s proposal reportedly will call for a limited “Wireless Carterfone” rule on some of the licenses in the 700 MHz band. Carterfone refers to the landmark 1968 decision that allowed competing devices to be connected directly to the AT&T network. Until then AT&T had complete control not over the telephone network itself but also over all devices (their trademark black rotary phone) that users could attach to it.

The Carterfone ruling opened up the market to numerous products, including answering machines, fax machines, cordless phones, computer modems and launched a new industry in innovative phone devices.

Such rules for the wireless network make perfect sense but they don’t solve the competition problem. They don’t address wholesaling or Net Neutrality, and are a far cry from true open access.

A Well-timed PR Offensive?

So to what extent does Martin’s plan create a “truly open broadband network”?

His may be little more than a politically calculated gesture that sounds appealing in the media but delivers little to none of the urgent reforms needed to revitalize the nation’s flagging Internet marketplace.

Public Knowledge’s Art Brodsky called Martin’s moves at USA Today and the Journal “impeccable” spin. Harold Feld of Media Access Project called it Martin’s “PR Offensive.”

“Martin and his staff made it appear as if the Commission was about to embark on a new, glorious age for consumers,” Brodsky wrote, adding that the definition Martin uses for “open access” is far different than what’s truly needed to foster real innovation and openness in the marketplace.

Martin floated his plan in advance of a Wednesday’s House Telecom Subcommittee hearing on open-access and the iPhone. It’s unclear whether this well-timed media play will derail efforts in Washington to create a network that is more open, neutral and accessible for everyone.

We certainly hope not.

= = =
UPDATE: See Harold Feld’s WetMachine for detailed analysis of Martin’s maneuver
= = =

On Thursday, Steven Levy made clear to Newsweek readers what is already obvious to many here: America’s Internet system is falling dangerously behind those in other developed countries. The root of the problem, according to Levy, is the “cozy duopoly” of cable and broadband providers that stifle competition and innovation while driving costs to consumers through the roof.

Busting the Competition Myth

But that’s only the half of it. The near absolute control of phone and cable giants is being bolstered by a Washington establishment that’s loath to upset this imbalance of power. The results are now beginning to show in survey after survey that reveal nationwide broadband failures.

Insulating the Duopoly

“It’s no surprise that those selling high-cost, low-speed broadband defend the status quo,” Levy adds. AT&T, Verizon, Comcast and their many Washington flacks and lobbyists are desperate to assert that everything is peachy in broadband land. There’s no need to upset a thriving free market, they crow while quietly pressuring Washington to pass laws that lock in their near total control of our connections to the Net.

What’s more worrying is the near total abdication by elected and government officials, who are allegedly in place to protect the public interest.

The Bush administration, which has pledged to make broadband cheap and affordable to everyone by 2007, is instead painting the same pretty picture of broadband success.

“I think our policies are a success,” FCC chairman Kevin Martin told phone company executives last week.

“We have the most effective multiplatform broadband in the world,” the administration’s top technologist, John Kneuer, told Web experts in San Francisco last week (to protests from his audience).

Kneuer says the real problem is not bad broadband services or market failure in America, but faulty data — blaming those who compiled the recent OECD broadband report for getting the facts wrong.

According to Newsweek’s Levy, “sniping at the methodology of that report is de rigueur among those who think our national broadband approach is just fine.” But the OECD data are not alone. Reports from the International Telecommunications Union, United Nations, Pew Internet & American Life Project and Communications Workers of America demonstrate nationwide problems with access, speed and affordability.

>> You can measure your own connection using CWA’s nifty tool.

So what’s really happening?

Phone and cable’s complete market dominance has translated to anti-competitive, anti-consumer practices that stifle innovation and push our speeds and services generations behind those available in other nations.

“It’s not just a matter of national pride,” SavetheInternet.com’s Ben Scott told Newsweek. “A country that’s fully connected has access to tools that let citizens do jobs that we can’t do. The cost of falling behind can be hundreds of billions of dollars every year.”

A few network giants like AT&T, Verizon and Comcast have staked out the market for themselves. They use aggressive lobbying, phony research and campaign contributions to bend government and distort the markets to their will. This twisting of our elected representatives is a grave problem that transcends any individual industry and weakens democracy at its core.

Sadly, many of those now in power have bought in. By their words and decisions, people like Kneuer and Martin now help phone and cable cement their dominance — implementing rules that help them further exploit consumers, stifle new innovation and insulate their status quo. America’s failing broadband report card is evidence of a larger systems breakdown.

That’s the problem. Here’s the solution.

To salvage this shipwreck, where cable and phone lines account for more than 95 percent of residential broadband access, we need to explore a policy that drove success in other countries — open access.

We have already recommended an open access solution for the emerging wireless platform. This would yield dozens of new and competing providers and result in lower prices, faster service, and a faster pace of innovation. We need to weigh open access benefits for wireline Internet as well.

Without Net Neutrality and open access, you will see a duopoly market that harms innovation in the short- and long-term, as we lose edge-of-the-network innovation and application diversity.

Smart investors recognize that broadband enables high-growth, and that these networks become more valuable the more “apps” they have. Killing Net Neutrality and locking in the duopoly may mean short-term gains for the major telcos, but in the long-run it devalues their network by stunting the growth of new businesses at the application level.

If they’re truly intent upon serving the public, Washington decision-makers need to foster new entrants and create an Internet access marketplace with real choice, speed and competitive pricing. Successful formulas used by other countries have lit a path to a better Internet for us at home.

Open and neutral access is the answer.

“On fourth down with the future of the Internet on the line, the Federal Trade Commission decided to punt.”

That’s how Derek Turner of Free Press summed up the Federal Trade Commission’s new report on “Broadband Connectivity Competition Policy,” which was released today in Washington. After months of study, the FTC concluded that federal policymakers should “proceed with caution.” Talk about a missed opportunity.

To its credit, the FTC did recognize the overwhelming public support for Net Neutrality:

Consumers — particularly online consumers — have a powerful collective voice. In the area of broadband Internet access, they have revealed a strong preference for the current open access to Internet content and applications.

But the agency’s conclusions largely ignore broadband reality. Millions of Americans can’t access or afford high-speed Internet services, and the United States continues to slip in every global ranking of broadband progress. Yet while the FTC twiddles it thumbs, the same phone and cable companies whose anti-competitive policies created this sorry situation are now proposing to become gatekeepers over Internet content and services.

Gigi Sohn of Public Knowledge scolded the FTC for standing on the sidelines:

Despite the fervent wishes of the FTC staff, there is not a competitive market for high-speed Internet services. New technologies, particularly wireless technologies, are not soon going to have the same robust qualities or market penetration as the duopoly cable and telephone-company services.

The FTC’s duty is to protect consumers. Yet this study includes no empirical research on competition in the local broadband market. It simply takes the incumbents at their word that the U.S. broadband marketplace is competitive — even though most U.S. consumers have at best two choices for broadband at home.

Media Access Project’s Harold Feld explains what’s at stake:

The FTC explicitly sidesteps what should be the central issue in our Network Neutrality policy debate: What will happen to the current vibrant civic and political discussions on the Internet if the cable and phone companies get to decide which speakers deserve faster speed? The Supreme Court has called the Internet a medium ‘as diverse as human thought.’ Without Network Neutrality, it threatens to follow the path of radio, television and cable and become instead a ‘vast wasteland’ where the ability to pay vast sums for premium treatment trumps the power of ideas.

The decision facing our policymakers in Congress and at the FCC is not about new regulations. Net Neutrality has been part of the Internet since its inception — and open access policies go back more than a century.

As Turner concludes:

The question is whether big phone and cable companies will be given a federal license to discriminate — or whether the free and open Internet will stay that way. This is not the time for caution, but rather for forward-looking and decisive action.

The Bush administration’s top telecommunications official reportedly tried to “shout down” Net Neutrality and open access supporters after they called him out for spinning America’s Internet market as a wonderland of competition and consumer choice.

John Kneuer, assistant secretary of commerce and head of the National Telecommunications & Information Administration (NTIA), “quickly lost his temper and began shouting” after an audience of technology experts pressed him to explain how the U.S. had fallen so far behind other developed countries in providing Internet access to citizens.

Bursting Kneuer’s Bubble

According to The Register on Friday, Kneuer claimed that free market competition was the reason for the Internet’s “great success,” dismissing the history of Net Neutrality protections that have fostered new innovations and public participation online.

Real Free Markets vs. Telco Control

Kneuer, who previously served as a top phone company lobbyist for Washington law firm Piper Rudnick, told the audience that the “free market” (by which he means the current duopoly of large phone and cable companies) should be unencumbered by consumer protections and basic Internet freedoms.

Kneuer is a member of the camp of neo-cons who categorically refuse to “even *think* about regulation to promote competition,” writes Harold Feld of Media Access Project.

To prop up their ideology they enthuse over the wonders of the free market, conveniently overlooking reams of data that show a balance of sound public policy and market forces to be the engine driving the Web’s real successes.

Kneuer and his industry comrades try to drown out evidence of market failure with pseudo-libertarian talking points about deregulation, free markets and competition. By mouthing this propaganda they provide cover for the phone companies that Web guru Cory Doctorow calls “corporate welfare bums” — creatures of government regulations that base their businesses on “government-granted extraordinary privileges.”

These “free market” industry lobbyists have no problem demanding the federal government leverage its muscle for themselves, Feld says. “Time Warner has successfully petitioned the FCC to force phone companies to terminate cable VOIP calls while the telephone companies have persuaded the FCC to launch a rulemaking to force ‘open access‘ to apartment buildings where cable operators have exclusive video contracts.”

So called “pro-competitive regulation” is OK when it gets them into a market. “It’s only when someone tries to break open their cozy little duopoly that they suddenly discover the religion of the marketplace,” according to Feld.

Broadband Reality Check

So what’s the real skinny?

• There is no competitive marketplace for Internet access in the United States. More than 95 percent of residential high-speed lines are owned by telephone and cable companies. That is a rigid duopoly by any standard. (Source: FCC)

• The result of duopoly control is higher prices for slower connections to the Internet. Compared to citizens in other developed nations, Americans now pay 10 to 20 times as much for far slower Internet services than those offered by modern European and Asian countries. (Source: Broadband Reality Check II)

• A full 37 percent of ZIP codes have one or fewer choices of a wired broadband provider. (Source: FCC)

So, Mr Kneuer, when both your phone and cable provider are pushing to gut Net Neutrality, what other “free market” choices does a consumer really have?

Phone and cable’s anti-competitive and anti-consumer practices have stifled innovation in both wired and wireless Internet applications, leaving U.S. services generations behind those available in other developed nations.

They have gained an unfair market advantage through aggressively lobbying lawmakers to hand over control of the Internet.

Sadly, many of these same lobbyists, like Mr. Kneuer, are now unblinking “officials” within a Washington establishment that seeks to help phone and cable companies exploit consumers, stifle new innovation and insulate the status quo.

A free market indeed.

FCC Commissioner Jonathan Adelstein has taken a stand for open access to our airwaves as the federal agency prepares to announce rules for the upcoming “700 megahertz auction.”

The move paves the way for better, more open and affordable access to the Internet for tens of millions of Americans. It’s now up to the remaining four commissioners to follow Adelstein’s strong lead.

Adelstein Leads the Way

“We need to identify meaningful spectrum on which to establish an open-access environment,” Adelstein told Reuters in an interview on Wednesday. “This will open these key airwaves to badly needed competition.

Momentum Builds for Open Access

The commissioner joins other prominent politicians and decision-makers, including presidential candidate John Edwards and Sen. John Kerry, who are joining the call for more open, neutral and competitive Internet marketplace in America.

The outcome of the auction and ultimate use of these new airwaves have revolutionary consequences. This valuable slice of airwaves could beam cheap, high-speed Internet signals to every park bench, schoolroom, workplace, and home in America. It could deliver essential wireless services to communities that have been overlooked by the cable and phone incumbents, which control high-speed Internet access for more than 96 percent of residential American users.

While rules governing this valuable slice of spectrum are complex, the issue captured the attention of more than a quarter-million Americans who earlier this month called on the FCC to open these airwaves.

Ending the Spectrum Swindle

For too long, spectrum use has been the byproduct of back-channel maneuvering between powerful industry lobbyists and government officials.

Dominant phone companies, including AT&T and Verizon, seem intent on hording this valuable asset. If their actions at earlier spectrum auctions are any guide, they will seek to team up against bidding by new entrants and stifle competitive and cheaper alternatives to their overpriced services.

The FCC must determine that the sale of spectrum be structured to foster new entrants in an Internet access marketplace that lacks real consumer choice and competitive pricing. Open, neutral access is the answer.

Members of the SavetheInternet.com Coalition — including Consumers Union, Media Access Project, Public Knowledge and Free Press — have urged the FCC to ensure that the upcoming auction sets aside at least half of the available spectrum for “open networks.”

In addition, more than 40 leading technologists, wireless innovators, civic organizations and others sent a joint letter to the FCC calling for a sizable portion of the airwaves to be licensed on an “open access” basis to usher more competition into the marketplace.

America can return to the forefront of Internet services by restoring the fundamental principles of open and neutral networks, SavetheInternet.com members told the FCC in a filing submitted to the agency on Friday.

Dear FCC: The Public Wants a Neutral Net

But if we abandon open networks and let phone and cable companies dictate broadband policies in America, the country will become a broadband backwater, with slower speeds at far higher prices than the rest of the developed world.

The 141-page filing, compiled by the Consumer Federation of America, Consumers Union, Free Press, Media Access Project and U.S.Pirg, is one of thousands of comments that poured into the FCC over the last several weeks — including people from all walks of life who filed using SavetheInternet.com’s tools.

Ten to One in Favor of a Neutral Net

By a factor of more than 10 to 1, people spoke out in favor of restoring strong Net Neutrality protections. It’s now up to the FCC to represent the overwhelming support for open and neutral networks in future decisions concerning the Internet.

The comments by the coalition groups demonstrate how previous decisions to abandon open access cleared the way for the emergence a “cozy duopoly” of phone and cable companies. These companies have dominated America’s Internet marketplace while failing the 1996 Telecommunications Act’s goal “to make available to all people of the United States… adequate facilities at reasonable charges.”

If the agency allows companies to continue to close systems, and implement discriminatory practices, the vibrant Internet that Congress sought to preserve in the 1996 Act will be imaginary, according to the filing.

‘Root Cause’ of America’s Broadband Decline

When Congress passed the 1996 Act, virtually all Internet traffic traveled via telecommunications networks that were obligated to provide nondiscriminatory interconnection and carriage under its Title II. At that time, the U.S. was the global Internet leader by far. But the FCC has since abandoned the principles of nondiscrimination, first for broadband provided by cable companies, then for telephone companies.

Today, we have fallen far behind dozens of other nations in providing fast and affordable access to citizens. The “root cause” of this decline: The U.S. has stripped neutrality and open access from the system while most of these other nations strengthened their commitments to these basic principles.

For example, the Netherlands have embraced open access on both their phone and cable systems. Now they are atop the OECD rankings in both per capita broadband penetration and growth.

In their comment filing, the groups state:

“With inadequate competition and little public obligation, the cozy duopoly dribbles out capacity at high prices and restricts the uses of the network, chilling innovation in applications and services and causing a much lower rate of penetration of broadband in the U.S. than abroad.”

Cozy Duopoly = High Prices for a Slow Internet

The comment highlights other ways that broadband services controlled by the phone and cable duopoly have failed in the U.S:

• Compared to citizens in other developed nations, Americans now pay 10 to 20 times as much for far slower Internet services.
• Due to duopoly control of markets (96 percent of residential broadband services are either cable or DSL) a full 37 percent of ZIP codes have one or fewer choices of a wired broadband provider.
• Phone and cable’s anti-competitive and anti-consumer practices have stifled innovation in both wired and wireless Internet applications, leaving U.S. services generations behind those available in other developed nations.

Breaking Out of our Broadband Quagmire

The Internet’s successes “have been built upon an open architecture, and only in recent years have we considered reverting back to the gatekeeper model of operator control. This would be a tragic error that would cripple the most democratic means of mass media since the printing press,” according to the filing.

The FCC should declare that discrimination violates the basic elements that have fueled the Internet’s growth until now, the groups’ conclude:

“The best way to break out of this quagmire is to return to the success policies of open communications that made the Internet possible and allowed the U.S. to be the world leader in the first generation of the digital age.”

To read the full comment, click here.

By Sen. John Kerry

I welcome this opportunity from the folks at SavetheInternet.com to let you know directly my thoughts on the “700″ auction. This is a very important issue, and I really commend the work done by everyone involved in the effort to get so much activism built up around what can be an arcane discussion.

Guest Blog Post by Sen. John Kerry Click here for more on Thursday’s hearing

There are a lot of powerful forces working to get the same-old/same-old, big-money auction; I’ve already gotten a letter from an industry group challenging my stance.

So it’s great to know that there are so many activists committed to working together for a better telecommunications infrastructure for the country. Our country has always pushed the curve and led the way in technological advances, and yet we are falling behind in broadband deployment to an alarming degree. That’s unacceptable.

And this auction, as all of you understand so well, is an enormous opportunity to start to give our country the telecommunications infrastructure it deserves.

Or at least to set up the conditions where entrepreneurs can do so. We don’t want to continue to tilt bandwidth policy to line the pockets of a privileged few.

I wanted to share my statement from the Commerce Committee hearing today. As I said, I’m watching the FCC on this, and my statements this week were a shot across their bow to let them know I’m not going to pull any punches.

Mr. Chairman, the upcoming auction of spectrum in the 700 band has profound implications for consumers, schools, businesses, emergency first responders, and rural communities. We are presented with a unique opportunity to shape the future of wireless communication and innovation in America.

With this auction, we stand at a crossroads—we can either provide extraordinary benefits to millions of Americans or tilt bandwidth policy to line the pockets of a privileged few.

There is a clear path I believe must be taken: the airwaves belong to the American people, and their use should serve the public interest.

We must establish rules in this auction that encourage competitive entry into the wireless market, spur innovation and increase affordability and availability of broadband services.

There is no argument that we are lagging in deployment. More than 60 percent of Americans do not subscribe to broadband service—primarily because they don’t have access or can’t afford it.

My own state of Massachusetts, a recognized leader in innovation and technological advancement, has a 49% broadband penetration rate. And it is 4th best in the country.

So this auction of very valuable spectrum, takes on heightened importance. How do we ensure it works for the American people?

First, the Commission must promote the broadest level of participation in the auction, to encourage competition – and enable entrepreneurs to think innovatively, and provide affordable, high-speed wireless broadband services. Auction rules should be directed at promoting additional market entrants. Open access proposals and innovative bidding rules must be closely considered.

Secondly, the FCC must settle on strict build out requirements that compel auction winners to offer services. Now, I understand the fears of industry in this area. If we are forced to build networks, it delays service and innovation.

I am confident the Commission can find the appropriate balance – The spectrum must be deployed in a reasonable time. What would be unacceptable is a set of rules that allow large companies to scoop up and warehouse this spectrum. I have been encouraged by the Chairman’s attention to this matter, and I will be looking for a strong set of requirements.

Finally, I am encouraged that the Commission is taking a close look at solutions for public safety. We have been working on the interoperability for quite some time. And despite our efforts, Mr. Chairman, interoperability remains one of our most vexing policy challenges — despite the lessons of 9/11 and Hurricane Katrina.

Providing an effective public safety communications network is of paramount importance, and I am encouraged that industry leaders are thinking about the topic in an innovative way.

All Americans have an opportunity to benefit from this auction. This is more than an issue of Government revenue – it is also about expanded access to revolutionary new technology for every American. Our economy, our schools, our families and our first responders are counting on the FCC to conduct a fair auction in the spirit of competition and innovation that drives our country.

I, for one, will be watching closely.

Members of the Congress on Thursday came out for “open access” during a Senate hearing on the auction of the “700 megahertz band.”

While rules governing this valuable slice of spectrum are complex, the issue captured the attention of more than a quarter-million Americans who last week called on the FCC to use these airwaves to create more open, neutral and affordable Internet access.

Opening the Airwaves Now a Public Concern

For too long spectrum use has been the byproduct of back channel maneuvering between powerful industry lobbyists and government officials. The licensing of our airwaves should be publicly debated.

The FCC’s Choice

Today’s Commerce Committee hearing provided hopeful evidence of a shift towards more transparency and accountability. During the hearing, Sen. John Kerry (D-Mass.) stated, “open access proposals and innovative bidding rules must be closely considered” before the FCC sets rules that will guide the sell off of our airwaves.

>> Read Sen. Kerry’s guest blog post at SavetheInternet.com

The FCC faces a critical choice for the future of the Internet. The auction is a chance to ensure that all Americans have access to high-speed Internet. The current business model – a marketplace dominated by cable and phone companies — has failed. We need open networks to better foster new entrants and innovation while driving down costs to consumers.

The 700 MHz band could beam high-speed Internet signals to every park bench, schoolroom, workplace and home in America. Cable and phone companies would rather the FCC allows them to rig the spectrum auction so that they can scoop up licenses and continue to dominate Internet access.

Why Verizon Wants Closed Access

Verizon executive vice president Dick Lynch attempted to scare Senators off the idea, telling them today that “saddling the auction with open access and Net Neutrality obligations would reduce interest” among businesses seeking to lease our airwaves.

His concerns are clear if not directly stated. The only ones who stand to lose from opening the network to new competitors are phone and cable companies like Verizon, AT&T and Comcast — the same companies, by the way, that exert near monopoly control over access for more than 96 percent of residential broadband users.

“Open access” principles make the network available on a wholesale basis to new entrants, services and applications. We would all benefit from a marketplace that is freed of gatekeeper controls.

>> For more on how gatekeepers stifle innovation, read Dr. Amol Sarva’s Senate testimony

The Momentum Shift

At the hearing today, Senate Commerce Committee Chairman Daniel Inouye (D-Hawaii) called the auction a “revolution of the communications landscape.” Sen. Kerry’s statements followed his editorial yesterday in The Hill urging the FCC to “establish auction rules that maximize the likelihood of innovation and ease competitive entry.”

Last month, presidential candidate John Edwards called on the FCC to “seize the chance to transform the Internet and the future” by requiring that half of the soon-to-be-available public airwaves be reserved for open access.

And last week, a group of more than 40 leading technologists, wireless innovators, civic organizations and others sent a joint letter to the FCC calling for a sizable portion of the airwaves to be licensed on an “open access” basis to usher more competition into the marketplace.

Members of the SavetheInternet.com Coalition — including Consumers Union, Media Access Project, Public Knowledge and Free Press — have also urged the FCC to ensure that the upcoming auction sets aside at least half of the available spectrum for “open networks.” Last week, more than 250,000 members of MoveOn.org Civic Action, Free Press and Working Assets Wireless, alongside other concerned citizens, contacted the FCC with similar concerns.

In the midst of all the details, lobbying and testimony, we can’t lose sight of why this auction matters. This may be our best opportunity to ensure universal, affordable Internet for everyone.

Today’s Senate hearing on the auction of the public airwaves is an important chance for political leaders to stand with the more than a quarter-million Americans who have called for this spectrum to be used to create a better, more open alternative to phone and cable Internet.

The hearing of Senate Commerce Committee members will begin at 10 am EST. You can watch streaming video or listen to streaming audio here.

As so much is at stake in the upcoming auction, the hearing has generated intense interest in the media and blogosphere (Matt Stoller’s recent post at MyDD is recommended reading).

Sen. John Kerry is taking a stand for auction rules “that maximize the likelihood of innovation and ease competitive entry.” Presidential candidate John Edwards has gone one further, urging the FCC to “seize the chance to transform the Internet and the future” by requiring that half of the soon-to-be-available public airwaves be reserved for open access.

Meanwhile, certain members of the Senate Committee have closed ranks with Big Cable, urging the FCC to keep the auction unfettered by conditions so that the nation’s largest communications companies can scoop up licenses and dominate Internet access to the benefit of no one but themselves.

Their plan to horde public airwaves would stifle competitive and cheaper alternatives to their legacy networks. This would be a disaster. After years of phone and cable company control over our Internet marketplace, the United States has fallen to 15th in the world in high-speed Internet rankings, with few choices and some of the highest prices for the slowest speeds in the world.

We will continue to fall as long as we let phone and cable execs dictate Internet access for more than 96 percent of American users.

The FCC and our Senate Commerce Committee members are weighing two options: use the public airwaves for the public good, or turn them over to self-interested corporations like AT&T, Verizon, and Comcast who consistently stifle innovation, monopolize markets and gouge consumers.

The choice of where to go from mere seems pretty obvious.