M2Z Networks, a VC-backed firm, is challenging the veracity of T-Mobile, an opponent of its proposal to the U.S. Federal Communications Commission to build a nationwide wireless broadband network that will offer free service to consumers.

M2Z, which is backed by Kleiner, Perkins, Caufield and Byers, Charles River Ventures, and Redpoint Ventures, approached the FCC in 2006 with an idea to use a fallow swath of spectrum in the 2155 – 2175 MHz band to offer free wireless data service in the U.S.

Not surprisingly most of the major mobile carriers opposed the idea on various grounds, but T-Mobile said that building a network in the band which is adjacent to its own spectrum will create interference with its current services.

M2Z on Tuesday said T-Mobile is using the same spectrum in the Czech Republic in a similar way as in the U.S., and a Czech Telecommunications Office report said that T-Mobile's service was operating without the the need for protective spectrum bands.

“This is like your neighbor building his roof so that it extends into your property and when he sells his house, the new owner claims an easement because of the overbuild,” said John Muleta, CEO of M2Z. “T-Mobile is arguing that American citizens don't deserve the use of their own spectrum because they overbuilt onto the next lot.”

Menlo Park, California-based M2Z has been waging a low-profile war for the past two years, but the company is now doing all it can to create a populist movement around its proposal.

The proposal is fairly straightforward. The firm asked the FCC to bypass the auction process and the technical rules that normally apply to the distribution of spectrum rights and grant it an exclusive 15-year license to the 2155 – 2175 MHz band.

M2Z claims that a free wireless broadband service offers unique public interest benefits. M2Z will build a nationwide network and offer free filtered, family-friendly service at a download speeds of 384 Kbps. It will use advertising revenue to support the free service using things like location-based search.

M2Z plans to generate additional revenue for a premium, unfiltered service operating at 3 Mbps. The firm plans to pay the U.S. government 5 percent of gross premium service revenue.

Last year M2Z started challenging the FCC on its long delay in answering its proposal and at the end of August 2007, the commission dismissed M2Z's application.

Earlier this year the FCC came up with an idea for a universal wireless service similar to M2Z's proposed service but with different bandwidth goals, and M2Z is now encouraging the public to pressure the FCC to act on what is now the commission's proposal.

A decision from the FCC is expected next month.

“The incumbent carriers like T-Mobile and AT&T have delayed this process for two years,” Mr. Muleta said. “We are ready to participate in an auction or whatever rules the FCC sets for free wireless broadband, but the FCC has to act.”