Ad-Supported Model

M2Z, which plans to bid if the FCC approves the auction plan, said its business model would use advertising to help fund the free Internet--a revenue scheme not shared by most of the cell phone industry.

"I don't know of any other major players" that would bid with such an approach, said Sascha Meinrath, research director at the New America Foundation. "For a new player, you basically have to have all your capital up front."

For the FCC to approve the auction proposal, Chairman Martin must persuade the commission's two Democrats, who have supported the proposal's concept, to side with him.

It is unclear whether the Democrats will back the proposal, though, especially since they will gain more authority when President-elect Barack Obama takes office, which will give them a three-vote majority on the five-member FCC.

The two other Republican members of the commission are likely to oppose the proposal, according to analysts.

Also on Tuesday, AT&T, Google, unions and public interest groups called for a national broadband strategy offering affordable high-speed Internet to all homes and businesses that want it.

Members of the group have often been foes on telecom issues in the past, but joined together to urge President-elect Barack Obama to spur investment in high-speed broadband by offering tax incentives, grants and low-cost loans. The items should be included in a multibillion-dollar stimulus package Obama has asked Congress to have ready for his signature when he takes office, according to the group.

Such investments would create a multiplier effect in the economy, said Rick Whitt, a Google lawyer. "These so-called innovation spillovers hold the promise to get our economy moving again," he said.

Google CEO Eric Schmidt is among Obama's most prominent supporters in the U.S. business community.

The United States ranks far below many industrialized nations in access and affordability of high-speed Internet, according the Organization of Economic Cooperation and Development.

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