Fire Chief

We’re less than a week away from the beginning of the much-anticipated auction of 700-MHz spectrum, but we still have no indication whether a wireless operator will bid on the 10 MHz of commercial D Block airwaves, which is supposed to be paired with public safety’s 10 MHz to provide the foundation for a nationwide wireless broadband network for emergency responders.

Since the well-chronicled demise of Frontline Wireless earlier this month, speculation has been rampant among industry observers whether an operator will submit a minimum bid of $1.3 billion for the D Block. And all we have is speculation, because the FCC’s anti-collusion rules prohibit the agency or anyone else from disclosing whether any entity even submitted a qualified application for the D Block license, much less whether they actually will bid on the spectrum.

I have yet to find an industry observer who believes there is better than a 50% chance that there will be a bidder for the D Block. The reasons for not bidding are numerous, but a key point is the $15 billion to $20 billion projected cost for a network that needs to provide unprecedented coverage and performance. In addition, the fact that the public-private partnership model is unproven represents the kind of uncertainty that investors are trying to avoid amid a projected credit crunch — a reality that apparently undermined Frontline.

However, FCC and public-safety officials continue to express optimism that there will be at least one bidder. I hope this optimism is warranted, because the proposed public-private partnership is an inspired way to give public safety much-needed broadband tools without having to find the massive amount of upfront capital to build a network.

If no D Block bidders emerge in this auction — and we won’t know that is the case until the auction is completed, probably sometime in March — the FCC would have to reauction the swath of airwaves, presumably with different rules governing the spectrum. This could be as simple as lowering the reserve price, or it could involve altering the buildout or public safety–related requirements.

Promising to complicate matters in such a scenario would be the timing of events. Even if a second auction is fast tracked, there’s a decent chance that the identity of the winning bidder would not be known until June. FCC rules provide the D Block winner and the Public Safety Spectrum Trust — the licensee for public safety’s broadband spectrum — six months to negotiate a complex network-sharing agreement. Such a timeline presents the possibility that the FCC would need to review the terms — or disputed aspects — of the network-sharing in December or January, when history tells us it’s likely that FCC Chairman Kevin Martin will be a lame duck or replaced, regardless of which party wins the White House.

If a typical post-election FCC transition occurs during this time period, it may be difficult for the agency to devote the kind of attention to the network-sharing agreement that it would like in a quick manner, as staff will be processing new appointments, shuffling offices and helping provide last-minute preparations for the transition to digital television that is scheduled for February 2009.

Regardless which scenario occurs, leadership from the PSST is a vital component to making the public-private partnership concept a reality. Educating the emergency-response community about the 700-MHz broadband endeavor is a must during the next several months. In addition, the PSST may have to work even more with public safety to retool expectations regarding network specifications in an effort to make the project more palatable to a commercial operator, without compromising the primary mission.

With the process having so many moving parts, it’s doubtful that the 15-member PSST board will be able to reach an internal consensus on all issues that will face the licensee. However, maintaining a united front publicly is crucial, as signs of dissension could undermine the PSST’s position in negotiating the network-sharing agreement.

Similarly, it is important that the PSST — an entity with no clear way to generate revenue until a network-sharing agreement is reached — demonstrate that it is financially stable enough to withstand even protracted delays, because any indication of weakness in this area could be exploited by the D Block winner in negotiations.

In a federal-government arena, decisions typically are made at a glacial-like pace. That has not been the case with this public-private partnership concept, which amazingly moved from a dismissed notion last March to an FCC order less than five months later. Hopefully, the pieces will fall into place — beginning with a commercial partner and strong PSST leadership — to allow this innovative idea to become a broadband reality for emergency responders.