For four years the Federal Communications Commission tossed the idea around like a beach ball: a coast-to-coast free wireless service across the low end of the 2GHz "AWS-3" band. The service would pay for itself via advertisements and by selling commercial access to various portions of the license area. The company that proposed the plan, M2Z Networks, would commit to building out the project in a decade, and pay five percent of its annual revenue to the United States Treasury.

But on Wednesday M2Z informed the press that the FCC has told the company and its backers that the Commission is dropping the concept, and that is so:

"We gave careful and thorough consideration to the proposal, but ultimately determined that this was not the best policy outcome," Ruth Milkman, chief of the FCC's Wireless Bureau told us. "We remain vigilant in our efforts to facilitate the universal deployment and adoption of broadband, especially through the much-needed reform to the Universal Service Fund."

Needless to say, the news came as a disappointment to John Muleta, CEO of M2Z.

"The FCC's decision to delay the use of this valuable spectrum forgoes the consumer welfare and economic stimulus that would result from putting new spectrum into the marketplace," Muleta declared in a reaction statement.

"A new nationwide broadband entrant that provided a free broadband service would have created tens of thousands of direct and indirect jobs throughout the country," he added, "while giving all Americans an equal opportunity to participate in the digital economy. Despite the spectrum crisis facing the U.S. as documented by the FCC's National Broadband Plan, the AWS-3 spectrum will continue to lie fallow providing no economic value to American consumers."

Absolutely in line

We're not privy to the specifics of why the Commission decided to forgo this idea. It went through various transmutations at the agency. Originally the plan included a means to filter out pornographic content, making it a "family friendly" proposal. But when publishing and civil liberties groups cried foul, former FCC Chair Kevin Martin dropped that piece from the picture.

It may be that the FCC just couldn't see a way to integrate this idea into the larger framework of its National Broadband Plan, with its emphasis on a national goal of 4Mbps access for consumers. The Plan does commit itself to finding some purpose for the 2155-2175 MHz zone, the license area that M2Z wanted. Now the government must rethink that part of the puzzle.

One thing is for sure, the wireless industry hated the proposal, and is happy about the FCC's announcement.

"We were pleased to learn that the FCC is closing the AWS-3 proceeding and will continue to focus on finding a proper pairing for the spectrum," declared CTIA - The Wireless Association's CEO Steve Largent. "Contrary to M2Z's statements, this is absolutely in line with the National Broadband Plan."

"As we had argued throughout the proceeding," Largent added, "a designer allocation auction that would be tailored for one company was not in the public's interest, especially when that company was offering broadband service that is slow by even yesterday's standards."

Indeed, M2Z's proposal would have offered wireless at a download speed of 768Kbps, the bare minimum of what could be considered broadband. But Muleta pushed back that this would have functioned as a kind of introductory speed for millions of Americans who don't have any Internet access at all and aren't even sure whether they want it. The service might have offered chance for them to discover that the 'Net really matters.

"Lots of people don't subscribe to any form of broadband because of price," Muleta insisted. "They're not asking for 100Mbps. They can't afford it. Free matters a heck of a lot to people who don't have basic services. Let's let these low-income consumers decide if they don't like free 768 Kbps. Let's not patronizingly decide for them."

In any event, this is all water under the digital bridge now. In our last post on this subject, we urged the FCC to make a decision about this idea one way or another, and now the agency has.

If it's any consolation to M2Z, while we disagreed with various aspects of the proposal (especially the smut-filtering component) we always admired the company's creative vision and drive. We hope that M2Z and its backers, Kleiner Perkins, Charles River Ventures, and Redpoint Ventures, will find better fortunes soon.