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Though the Federal Communications Commission rejected its initial efforts to bring "fast, free, and family-friendly broadband to 95 per cent of the US population," Silicon Valley startup M2Z Networks has vowed to fight on. Company co-founder and CEO John Muleta is even threatening legal action against the commission - which happens to be his former employer.

M2Z hopes to build a free broadband network on a largely-unused slice of the US wireless spectrum, and for fifteen months, the FCC completely ignored its efforts to license the band. The commission finally dismissed the proposal late last week, calling for a public review of the spectrum, and John Muleta is less than happy. The former chief of the FCC's wireless bureau says the commission is curbing competition in the broadband market as it panders to big telcos like AT&T and Verizon, and he's adamant the feds broke the law in waiting more than a year to review his application for a license.

"The commission's decision was legally incorrect, and we will ask the courts to review it," Muleta told The Reg. "There has to be new entries into the market. There has to be competition. There has to be a way of addressing the fact that the Silicon Valley innovators are being blocked out of the process. And we think that the courts are the most likely to be objective about this."

M2Z has its eyes on the "2.1GHz" or "AWS-3" band, a chunk of US spectrum between 2155 to 2175MHz. With this band, the company hopes to build two separate broadband networks: a free service offering 384kbps download speeds, and a for-pay service that cranks things up to 3Mbps for "between $20 and $30 a month."

In years past, the big telcos used this band for back-end microwave connections, but they've been told to leave. According to Muleta, the FCC has spent the last seven years watching this wireless real estate go to waste. "AT&T and Verizon are just squatting on this spectrum, because the FCC hasn't figured out what to do with it," Muleta said. "Then we stepped in and said 'Look, give us a chance.'"

In an application filed in May of 2006, the company suggested that the FCC fork over a license to the band in exchange for a cut of its future revenues. Four months went by without an answer, and though that's little more than a blink of the eye in FCC time, M2Z was compelled to slap down a "forbearance petition," demanding a response within a year of its original filing. Failing to review the application within 12 months, the company said, would violate the Telecommunications Act.

"From the day we showed up, there was nothing preventing the commission from saying 'good idea guys' or 'bad idea' guys. They could have at least gotten the process going and started looking for other ideas, but they didn't do that," Muleta said. "That's not the way a speedy government ought to work."

Well, the FCC has rejected both the application and the petition, and Muleta is mulling over a response in federal court.

According to Jonathan Kramer, a telecommunications attorney with Kramer Telecom Law Firm in Los Angeles, the court isn't likely to help. M2Z is facing the legal equivalent of a nearly-vertical mountain face.

"They better get their rock climbing gear on because it's going to be almost straight up and there are going to be very few crevices to drive a pin into," Kramer told the The Reg, citing a 2006 case that EarthLink brought against the FCC. "If M2Z were to move forward now [with legal action], they would end up spending a lot of attorney's fees and get a lot of publicity, but not necessarily a desirable result."

As it stands, the FCC is taking public comments about the 2.1GHz band, and at the very least, M2Z will continue to lobby for a license. "We will tell them again that Americans deserve free over-the-air broadband and that we'd be happy to provide it," Muleta said. "We're in this for the long haul. We're in this for the principle."

M2Z isn't the only one showing interest in this particular piece of wireless real estate. The FCC has also rejected a free broadband application from a company called NetfreeUS, and Google has suggested the spectrum could be used for the sort of open internet access it's calling for on the 700-MHz band.

Of course, El Reg Associate Editor Andrew Orlowski thinks all this is ridiculous. ®

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