As auction wanes, public safety weighs its options: Former NTIA Chief says it’s OK that D-Block bidding languishes, other disagree

As the 700 MHz auction winds to a close – apparently without a winning bidder for the commercial/public-safety license or a clear roadmap for meeting first responders’ communications needs – progress is nonetheless being made on other fronts.
The Department of Homeland Security’s Science and Technology Directorate recently announced the award of $6.3 million contract to Thales Communications Inc. to demonstrate what is billed as the first portable radio prototype capable of enabling interoperable communications among police, firefighters, and emergency medical service personnel in different agencies. According to DHS, the radio looks much like existing portable radios and would carry a similar price tag of $4,000 to $6,000. Thales is based in Clarksburg, Md.
“We are committed to identifying innovative technologies aligned with the communications needs of first responders,” said Dr. David Boyd, Director of S&T’s Command, Control and Interoperability Division at DHS. “By enabling seamless radio communications among multiple agencies, the multi-band radio project represents a significant milestone in overcoming the communications challenges our nation’s emergency responders face during large-scale disasters.”
DHS said the contract has a performance period of 12 months and that its CCI unit will manage the multi-band radio demonstration to determine how well the technology meets the critical needs of frontline emergency responders.
Public-safety uncertainties, hopes
John Kneuer, senior VP for strategic planning and external affairs at Rivada Networks, said the lack of a bidder willing to pay the $1.3 billion reserve price for the 700 MHz D Block presents an opportunity to address near-term first-responder needs. Rivada, with offices in Ireland, Colorado and Washington, D.C., markets an Internet protocol-based solution with an interoperability component.
“If the D-Block auction had produced a licensee, the needs of public safety would have been chained to one ‘monopoly’ private carrier with major uncertainties as to the financing, construction and maintenance of the network. That approach was sure to bring years of additional delay and conflict,” said Kneuer, who led the development of a $1 billion grant program for interoperable public-safety communications as former director of the National Telecommunications and Information Administration.
“The policy approach we propose would deliver results right away, not years from now, at far less cost than attempting to force the construction of an entirely new national network with uncertain funding and regulatory requirements,” Kneuer stated.
But DHS’ Boyd had a different view. “There is still going to be a need for alternative [public safety] communications,” he said. At the same time, he conceded first responders cannot easily abandon existing public-safety infrastructure valued at $100 billion.
Charles Werner, chief of the Charlottesville, Va., Fire Department, recommended staying the course on the 700 MHz D Block. But he said rules should be modified for the next go-round.
“Now that $19 billion-plus has been generated in the overall 700 MHz auction and thus meeting all of the budget requirements (with a surplus), this is a great opportunity to eliminate the minimum bid,” said Werner. “Perhaps even use some of the surplus to subsidize (not build) the network buildout and sweeten the pot for the bidder and expedite the buildout for public safety.”
Werner warned against weakening network requirements. “That should be a last resort because this is a one-time opportunity to build a network that will be resilient and establish the redundancy and reliability that public safety requires,” he said. “Once built, it is unlikely to be upgraded at a later date.”
Werner expressed confidence the FCC will take steps to ensure the commercial/public-safety broadband network is realized.
“A national broadband network for public safety is imperative to enable the vast applications available to public safety such as geospatial data, criminal data, RFID, situational awareness, real time video and more,” Werner said.
Congress decision awaited
Congress appears poised to weigh in on the 700 MHz public-safety issue after the auction ends to consider licensing options and perhaps to investigate circumstances surrounding the collapse of the startup company – Frontline Wireless L.L.C. – that had appeared committed to winning the D-Block license at the auction. Frontline Wireless shut down two weeks before the Jan. 24 start of 700 MHz bidding.
Passing 200 rounds
Meantime, it appears bidders were not frightened off by passing the 200-round milestone in the auction, as new bids continued to trickle in at a slow but steady rate. New bids fluctuated between four and eight per round for most of last week.
In an attempt to hasten the end of the auction, the FCC late Friday said it would move the auction to 14, 10-minute rounds per day starting this week and also increased the amount of new bids. The auction has been operating under 10, 15-minute rounds per day since March 4.
Most of the bidding last week was focused on the 12 megahertz B-Block licenses covering more rural locations as well as licenses covering parts of Puerto Rico. There was also the occasional bid for the six-megahertz E-Block license covering American Samoa.
Funds trickle in
Overall, most of the event’s new bids had been placed on licenses valued at less than $100,000, and thus the new money being added to the auction’s bottom line has been around $20,000 to $30,000 per round. After round 234, total potential winning bids topped out at just over $19.591 billion. The FCC said it will release the names of winning bidders following the close of the auction.
Ric Prentiss, a telecom analyst at Raymond James, predicted in a note that Cox Communications Inc., the No. 3 cable television operator, could end up being one of the top 700 MHz bidders. Prentiss said that would benefit the tower industry, though adding he did not “expect a lot of other surprising large new spectrum owners.” He noted Cox has a major presence in San Diego, Las Vegas, Phoenix and New Orleans.