Despite the $4.5 billion price to bid in the auction of 700-MHz spectrum, the auction represents the best opportunity for smaller businesses to participate in broadband expansion, FCC Chair Kevin Martin told a House committee Wednesday.

In testimony before the House Committee on Small Business, Martin said the open-access rules that will govern the auction of a third of the spectrum will benefit small business by improving access to wireless broadband, allowing small businesses to compete in providing wireless devices and software, and "providing meaningful opportunities" for small businesses to gain access to the spectrum.

Speaking to reporters after his testimony, he brushed aside a lawsuit from Verizon that called for the FCC to remove the open-access requirements. "I don't have any plans to try to revise our open-platform rule the way Verizon wants us to," he said. Verizon had asked the Court of Appeals for the District of Columbia to expedite a hearing, but the court refused.

Auction Delayed

On Thursday, the FCC announced it would delay the auction date by eight days. It is now set for January 24. In addition, there will be a $10 billion limit on the auction bidding.

The auction will foster deployment of rural broadband, Martin said, because the rules will require licensees to serve at least 70 percent of their geographic area. "The Commission has tried to ensure these areas have the same access to broadband enjoyed elsewhere in the country," he said. Wireless broadband connections will be available to "businesses of all sizes and in nearly every location, not just corporate headquarters in major metropolitan areas," he said.

The open-access provisions are a critical factor in making the spectrum accessible to small businesses, he added. "It is our goal that this open platform requirement will allow smaller businesses -- namely, nascent wireless device manufacturers and smaller application software developers -- to put their products directly into the hands of consumers without having to seek prior permission from the wireless providers, as they do today," he said.

Fostering the Next Internet

Martin went on to say that the open-access rules would create greater opportunities for innovation and that the "open-platform requirement" would have an impact on broadband akin to the break-up of the old AT&T.

That breakup led to innovation in telecommunications, he said, "driven by entrepreneurs, who for the first time were able make their latest innovations available directly to consumers and compete in the equipment market to which they had previously been denied access."

According to Martin, just as the break-up led to the Internet, the model of open access will provide similar benefits for wireless entrepreneurs "by allowing them to introduce an array of niche applications and devices for the open wireless platform, including those tailored to meet the unique needs of small businesses and individual consumers."

Perhaps most importantly, Martin said the FCC would provide bidding credits for eligible small businesses. The bidding credits enabled small businesses to win 55 percent of licenses in last year's AWS-1 auction, he said.