Public safety network up in the air
Potential bidders for RF spectrum balk at cost, network requirements
- By William Jackson
- Apr 25, 2008
The Federal Communications Commission's plan for allocating a band of radio frequency spectrum for an interoperable public safety network ran into dead air earlier this year, and FCC and Congress are trying to decide what to do about it.
In some ways, the auction in the 700 MHz band was a success, producing a record $19.6 billion from 101 bidders who won more than 1,000 commercial licenses to use the airways.
But the centerpiece of the auction was to be the reallocation of a 10 MHz band, called Block D, intended to enable a nationwide public safety network. But the block didn't come close to selling, and FCC and Congress are struggling with how to make the best use of that valuable RF real estate while ensuring that the nation's first responders have access to advanced broadband communications.
'I encourage the commissioners to be open to new ideas in this area,' Rep. Edward Markey (D-Mass.), chairman of the House Energy and Commerce Subcommittee on Telecommunications and the Internet, said during a recent oversight hearing on the auction.
There is broad agreement on why Block D failed to attract a winning bidder: financial uncertainty created by a high reserve price and onerous build-out of the network, along with service requirements that would interrupt commercial services to give priority to public-safety organizations during emergencies.
There is no consensus yet on how to fix that. Some of the options being considered are tweaking the auction rules and trying again; offering regional licenses rather than a single nationwide license; selling off the block for commercial use and giving the proceeds to public-safety groups to negotiate their own networking deals; or selling it off for commercial use and finding some other public-safety funding vehicle.
The 700 MHz band now is being used primarily by TV broadcasters. It is being freed by an FCC mandate moving TV from analog to digital signals by next February.
The rest of the available spectrum was sold ' and software that handled 261 rounds of anonymous bidding worked flawlessly ' but Block D received only one bid for $472 million, about a third of the minimum bid set by FCC.
Steven Zipperstein, general counsel at Verizon Wireless, said the company did not bid on Block D because the 'economics are fundamentally flawed.' He said the cost of building the public-safety network 'far exceeds the value of the spectrum.'
Also, the winning bidder would have to negotiate a network-sharing agreement with the Public Safety Spectrum Trust after buying the license and pay a stiff penalty if it failed to complete it. 'This 'buy now, negotiate later' approach is backward,' Zipperstein said.
Zipperstein said the advisers to the Public Safety Spectrum Trust were placing unrealistic requirements on potential Block D licensees, including a $50 million annual spectrum lease payment.
The public/private partnership for the Block D auction was not the first choice for many in Congress and FCC. Most commissioners favored some form of direct funding for the public-safety network.
'Public safety does not have the funds to build a network,' said FCC Chairman Kevin Martin. The cost of building such a network has been estimated at $6 billion to $7 billion. Martin said that without congressional funding, a public/ private partnership for Block D remains the most viable alternative for establishing a network.