Spectrum auctions have proven themselves to be a lucrative way for the US government to distribute unused spectrum. As wireless technologies mature, demand for unused spectrum increases. That's why so many were disappointed with the US government delaying the shutdown of analog television broadcasting until 2009. Analog TV occupies some prime wireless real estate that could arguably be better used.

One such auction is slated for next month, where the Federal Communications Commission is expected to raise between US$8 billion to US$15 billion as it sells off some empty bandwidth. Three Silicon Valley venture capital firms are eyeing a chunk of that spectrum and have contacted the FCC with a plan that would take about 20MHz of it off the auctioneer's block.

The three firms, all of which have over US$1.5 billion in assets under management, have banded together to back M2Z Networks, Inc., a new firm that is eyeballing the spectrum. M2Z's plan works like this: let us have the 20MHz slice of spectrum between 2155MHz and 2175MHz for the next 15 years, and we'll give the government 5 percent of the gross revenues generated from selling wireless broadband access.

M2Z would offer two tiers of wireless broadband service: a free, ad-supported service that would top at at 512Kbps, and a premium, paid-service that would presumably be much faster. There are currently no details available on which technology would be used to provide the wireless broadband service, but it's safe to guess that it will be WiMAX which is finally nearing an official US rollout.

In its FCC filings, M2Z has played the universal access card, reminding the Commission of President Bush's stated desire to have broadband available all across the US by 2007. It is also promising to provide "state of the art" filters to block access to sites deemed undesirable. Making such content filtering an option for those who are concerned about innocent eyes stumbling across undesirable content makes sense, but incorporating it wholesale into its wireless broadband offering would be bad business.

So far, the FCC has yet to officially comment on M2Z's proposal. There has been at least one meeting between the two parties to talk about the idea. If the decision is to be made based solely on the almighty dollar, then the question that follows is whether 5 percent of the gross revenues over 15 years is better than a guaranteed seven- or eight-figure check written at the conclusion of the auction. If M2Z's proposed network can provide service to areas traditionally underserved by broadband today (e.g., rural areas) while providing a compelling alternative to the DSL and cable duopolies in larger towns and metropolitan areas, it could prove to be quite popular.