Late Friday, the FCC rejected a petition by M2Z Networks to receive an exclusive, 15-year license to build and operate a national wireless network in the 2155MHz-to-2175MHz band that would offer both free 384Kbps broadband with the option of paying for higher speeds. In return for the free spectrum, M2Z offered to pay the US Treasury 5 percent of its gross revenues each year.

The FCC said that it wouldn't allow a single company to control the slice of spectrum without first seeking broader comment on how it would be used to serve the public interest. Furthermore, it pointed out that the 384Kbps downstream speed was quite slow and wouldn't even be considered broadband if a new law that seeks to raise the current benchmark from 200kbps to 2Mbps is passed:

"In addition, we also note that the construction benchmarks proposed by M2Z are not particularly aggressive and are misleading as far as the actual extent of their coverage. As a result, we find that M2Z's proposal does not serve the public interest, and in fact, that granting its application would prevent, rather than facilitate, widespread broadband deployment."
AT&T and Verizon Wireless, the two biggest US mobile phone carriers, will no doubt be satisfied with the decision as they had strongly opposed M2Z's plan, saying the airwaves should be licensed through the regular auction process. M2Z has complained that the FCC was slow to act on their request out of loyalty to wireless broadband operators and is deciding whether to challenge the decision in court.