It seems that the FCC is finally on the cusp of approving a comprehensive nationwide free broadband plan.
The FCC has long considered nationwide free broadband as a means of improving US broadband adoption rates. Despite being a tech-savvy nation, the US still has 100 million people that are not connected to the internet. Despite the obvious importance of getting these people online, the telecom companies (particularly T-Mobile and AT&T) have fought the free broadband plan tooth and nail.
There are many competitors for the contract in question. However, one name stands out from the pack.
The FCC should award this contract to M2Z Networks. Here are eight reasons why doing anything else would be a mistake.
To anyone that’s looked, the fact that 30% of Americans remain offline is a huge and immediate concern. Market research has shown overwhelmingly that the reason why most of these Americans are still offline is because of price concerns. As M2Z CEO John Muleta said in an interview with TheNextWeb, “with the availability of Netbooks at $250 and $300, it’s simply insane to charge $700 a year for basic internet service. ”
By comparison to their competitors, M2Z has pledged to roll out their service to 50% of Americans in four years and 95% in ten years. This is quite an ambitious project, but it’s doable. What’s more, the infrastructure creation this will require will generate thousands of new jobs.
Ease of Use
M2Z’s proposed interface is incredibly simple. Getting online on M2Z’s connection will be as simple as logging in with a username and password through your browser. Once online, you’re able to access a 768 Kbits/second free connection. M2Z plans to offer a freemium model, where users can pay a fee to upgrade to a 6 Mbits/second connection.
From the beginning, M2Z’s mission has been to provide free broadband connections. Comparing the use of wireless spectrum to over-the-air TV broadcasts, Muleta said that “since spectrum is essentially public property, we feel a responsibility to provide at least a free service for the public good.” Name a single telecom or cable company that does that. Muleta makes a compelling argument here; since spectrum is indeed a public good, why isn’t there an expectation that users of that spectrum (AT&T, T-Mobile, Verizon, Sprint, Clear, etc) will provide at least a minimum basic service?
M2Z is wholeheartedly in favor of Net Neutrality. Yes, you read that correctly. M2Z is an ISP that is in favor of net neutrality. When I asked Muleta about this, because I couldn’t believe what I was hearing, he said simply “Look. We’re all Silicon Valley guys at this company. We know that Net Neutrality is a fundamental part of a good user experience. If we lose Net Neutrality, we lose part of what makes the internet such a force for good.”
Free For All
Unlike M2Z’s competitors, M2Z doesn’t want to limit their market to underprivileged internet users. Muleta says that if access to free internet is restricted by income, nothing would fundamentally change at the ISP level. The duopoly of cable and telecom providers would still control much of the marketplace.
By providing a basic free service, Muleta thinks that M2Z will force ISPs to shape up. Citing his time as the head of the FCC’s Wireless Telecommunications Bureau, he said that ISPs would behave much like cell phone providers did when cell numbers became portable across carriers. When consumers saw that there was an easy alternative if they were displeased, overall levels of service went up across the board. Ironically, attrition rates ended up going down, contrary to cell phone providers’ concerns.
Upsetting The Status Quo
Part of the reason why competition among ISPs has been so stagnant is due to one major problem. In order to compete against most established ISPs, new ISPs need to lease “the last mile” of cable into the home from telecom companies or cable providers. Once you’re leasing from your competitors, they can squeeze you dry on the prices and drive you out of business. Indeed, that’s what happened to PSINet, Muleta’s first ISP. They provided value-added services to leased bandwidth from their competitors and their competitors squeezed them out.
M2Z is different. The company plans to build a nationwide LTE network to provide data themselves. No need to worry about the last mile. In addition, Muleta says that M2Z has plans to sell some of their high-bandwidth connections to companies like AOL and DirecTV as part of their potential broadband bundles.
Simply put, M2Z has an incredible board. The CEO is a former bureau head at the FCC, and before that he ran an ISP. The company’s CTO is a former programmer for Lawrence Livermore Labs and Los Alamos. The rest of their management team is similarly qualified. They all have relevant experience and the skill necessary to pull off the construction of such a complicated network.
M2Z has secured $500 million in funding commitments from some very impressive sources. Kleiner Perkins, the firm that invested in Google, Sun and Amazon, has invested in M2Z. So too has Redpoint Ventures, who invested in Ask Jeeves, Tivo and Myspace. There’s a saying in the investing community: a good track record is no indicator of future performance. However, it’s probably a safe bet to guess that Kleiner Perkins and Redpoint wouldn’t throw down that much money for no good reason.
In short, M2Z’s entry into the market will increase competition, improve service quality and drive down prices for consumers. At the same time, it will provide quality service for users that cannot afford a paid connection. It’s a win-win situation for everyone except for the cable companies and telecom companies.