Frontline’s Hundt: D-Block rules were too vague: Public safety: Let’s re-auction this year

A former executive of now-defunct Frontline Wireless L.L.C. said rules for the national commercial/public-safety license that went unclaimed in the recently completed 700 MHz auction were ambiguous and poorly designed, warning that a rush to re-auction the D Block without making fundamental changes would fail to improve first-responder communications or foster wireless competition.
“I don’t think we need a fire sale for firemen,” said Reed Hunt, former vice chairman of Frontline Wireless.
Hundt, former chairman of the Federal Communications Commission during Clinton administration, said the FCC should spend the rest of the year carefully developing clear and fair rules for the D Block, and should auction the spectrum next year when economic conditions have perhaps improved.
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In addition, Hundt said the FCC should ensure that all public-safety-related components associated with the D Block are operated in a not-for-profit manner. If the agency takes such steps, Hundt predicted “there would be new bidders for the D Block.”
If the FCC fails to substantially reform D-Block rules and holds the auction this year, Hundt said a national cellphone carrier is apt to swoop in and nab the D Block on the cheap.
Verizon Wireless and AT&T Mobility, the nation’s largest cellular operators, accounted for the lion’s share of the record $19 billion raised in the 700 MHz auction.
The D Block attracted only one bid — from Qualcomm Inc. — early in the auction, but it was far below the $1.3 billion reserve price. The reserve price, penalties on the D-Block winner for failing to reach a network-sharing agreement with the public-safety broadband licensee, buildout timelines, coverage requirements and other guidelines are expected to be re-examined in an upcoming FCC rulemaking.
Frontline Wireless, then a Silicon Valley-funded startup, folded less than two weeks before the Jan. 24 start of the auction.
Controversy has swirled in the aftermath of Frontline’s collapse over a $50 million-a-year public-safety spectrum lease that was put on the table by Cyren Call Communications Corp — the venture capital-funded advisor/agent to the Public Safety Spectrum Corp. — in discussions with Frontline, Verizon Wireless and other prospective bidders. The FCC and Congress are investigating the allegations.
FCC Chairman Kevin Martin said he wants to re-auction the D Block later this year.
Public-safety comments
At the Wireless Communications Association International conference yesterday, leading public-safety stakeholders said they favor holding the D-Block re-auction this year after rule revisions are approved by the FCC.
Harlin McEwen, a retired police chief of Ithaca, N.Y., who chairs the PSST, defended the not-for-profit group’s ties with Cyren Call and the public-private approach to the D Block. McEwen also stressed that he’s the boss, reacting to media reports and blogs suggesting Cyren Call’s Morgan O’Brien is actually calling the shots.
“There’s been a lot of speculation in the media that we’re the tail and he’s the dog. I can guarantee you I’m the dog and he’s the tail,” McEwen stated. During the question-and-answer session, McEwen added: “Our goal isn’t about Morgan; our goal is to get a public-safety network. And we selected Cyren as a very able advisor.”
McEwen said if Cyren Call was not advising the PSST it would be some other entity because the organization needs expertise on commercial aspects of building a national wireless network.
McEwen, noting he has been meeting with FCC commissioners about the issue, recommended relaxing or eliminating the D-Block’s $1.3 billion reserve price and the penalties associated with the winning bidder’s failure to negotiate a network-sharing agreement with the PSST. He said the FCC needs to better define the expectations of D-Block bidders.
“We’re working on that right now, and we hope to provide some of that information to the FCC as they begin to develop rules for the next auction,” McEwen stated. “A lot was left to negotiation in that last process.”
O’Brien said Cyren Call has been directed by the PSST to be more aggressive in scouting out potential bidders for the D-Block re-auction.