M2Z Networks on Monday cheered an FCC report that questions a T-Mobile charge that a wireless broadband network proposed by M2Z to offer free service to consumers would create intolerable interference.

The FCC report removes a major hurdle that delayed a commission decision on a long-held Silicon Valley dream–an open-access mobile broadband network that is not controlled by a major carrier.

M2Z, a Menlo Park, California-based VC-backed startup, approached the FCC in 2006 with an idea to use a swath of unused spectrum in the 2155 –2175 MHz, referred to as the AWS-3 band,  to offer free wireless service in the U.S. (See Startup Pushes Free WirelessBroadband for Everyone)

At least two of the major mobile carriers opposed the idea, but T-Mobile said that building a network in a band adjacent to its AWS-1 spectrum band (2110 – 2155 MHz) would interfere with its ability to offer mobile services.

The FCC delayed a vote on the free service proposal, which was set for last June, to investigate the interference charge.

On Friday, the commission published the results of a detailed test of the potential for interference between the two bands. The tests found T-Mobile’s conclusions and charges to be overblown.

“They forced the FCC to do a fifth test on this. We had done a test. Verizon had done a test. T-Mobile did a test, and Ofcom (theBritish version of the FCC) did a test, so this is a bit of a Groundhog’s Day for us,” said John Muleta, CEO of M2Z.

Back in June the commissioners on the FCC seemed amenable to the idea of a mobile network that offers free service to consumers.

“There is now no further reason to delay this, so it’s now up to the FCC, which has been talking about an all-inclusive broadband strategy and this is a private sector solution to that problem,” Mr. Muleta said.

The next step in the process is a vote by the FCC and if the commission votes in favor of the proposal, the following step is likely to be an auction of the AWS-3 spectrum.

“When we originally proposed the idea, five companies showed up, three of them publicly traded, so I suspect these five will be bidders for this spectrum along with us,” Mr. Muleta said.

“We are backed by three of the best Silicon Valley VCs and underlying all of this is the intense desire in the Valley to have a new platform that’s open-access and provides service to as many people as possible,” he said.

M2Z is backed by Kleiner Perkins Caufield and Byers, Charles River Ventures, and Redpoint Ventures.

M2Z sees its proposal as a replay of the Wi-Fi phenomenon where a group of engineers took what was considered junk spectrum and used it forWi-Fi--unlicensed spectrum that now generates immense revenue and value.

“We need something that complements Wi-Fi in the licensed space and we think this is the right band to do it in,” Mr. Muleta said.