The government gave a failing grade to a prototype device that Microsoft Corp. (MSFT), Google Inc. (GOOG), Dell Inc. (DELL) and other technology companies said would beam high-speed Internet service over unused television airwaves.

In a 85-page report, the Federal Communications Commission on July 31 said the devices submitted by the technology coalition, informally known as the White Spaces Coalition, could not reliably detect unused TV spectrum, and could also cause interference.

Despite the setback, FCC chairman Kevin Martin said Tuesday the agency still would like to find a way to transmit high-speed Internet service over the unused airwaves.

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Edmond Thomas, who represents the technology coalition, said the companies are convinced the spectrum can be used without causing interference to TV and wireless microphone signals.

"We intend to work with the FCC in order to identify the discrepancies in their tests with the tests we've done," Thomas, who is a former chief engineer with the FCC, said Wednesday.

The technology coalition — which also includes Hewlett-Packard Co. (HPQ), Intel Corp. (INTC) EarthLink Inc. (ELNK) and Philips Electronics North America Corp., a division of Netherlands-based Royal Philips Electronics NV (PHG) — said it will work with the FCC to resolve any questions.

The technology companies say the unlicensed and unused TV airwaves, also known as "white spaces" and found in both the VHF and UHF sections of the spectrum, would make Internet service accessible and affordable, especially in rural areas and also spur innovation.

However, TV broadcasters oppose usage of white spaces because they fear the device will cause interference with television programming and could cause problems with a federally mandated transition from analog to digital signals in February 2009.

If the device eventually is approved by the FCC, it could adopt rules for operating unlicensed devices in the white-space spectrum by October, according to its own timetable.

By December, the agency could start certifying similar devices, which means manufacturers of the devices must show their technology conforms to the agency's technical requirements.

But any such devices would not go on sale until after Feb. 18, 2009.