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Apr. 16, 2008

The Federal Communications Commission's recent wireless spectrum auction raked in twice as much revenue as any of the most conservative congressional estimates.

It officially closed with just less than $19.52 billion of net new money in the FCC's coffers. That amount is about 85 percent more than what most observers had expected and currently has a lot of people talking.

Although some can guess that the Federal Treasury and FCC's Chairman Kevin Martin are pleased with the financial windfall, the so-called D-Block spectrum is the official black cloud lingering over many heads...

To be sure, early reports place Verizon Wireless as the largest spender for the whole spectrum, paying over $9.96 billion for the open-access C-Block licenses.

For its part, AT&T spent a tad over $6.59 billion for 227 B-Block licenses. Google, which had been the most vocal in the early development of the auction's rules and pushed hard for open access, surprisingly walked away without any licenses at all.

Some say that the way the auction was structured (part commercial, but dominated by public safety) it could perhaps hold even more conflicting business plans than could have been initially assumed.

About the only company that publicly expressed interest and had the nerve to go after the license – Greensboro, N.C., startup Frontline Wireless, actually dropped out due to lack of financing. Just a few days later, the company actually declared bankruptcy.

Some observers point actually to two key factors for the D-Block failure. First, there are unique pressures associated with managing an emergency network, and the unexpected and certaily untimely withdrawal of Frontline Wireless. It had aggressively targeted the D Block for months and was assumed as THE prospective holder of the license...

The FCC's D-Block was uniquely and purposely reserved for public safety, offering people a reliable emergency wireless link in case of any national or local emergency, 24/7. It was earmarked for the creation of a public safety network, promising a better, unified, nationwide communications link for emergency first responders.

But during the auction, it failed to meet the minimum required bid, and Frontline was deemed as being grossly underfinanced.

Since the close of the auction, Rep. Ed Markey, chairman of the House Subcommittee on Telecommunications, has jumped into the fray, saying he wants to discuss possible re-auction plans for the D Block, investigate the minimum bid requirement, the authority of the public safety spectrum trust and other similar conditions attached to the available license.

There are even some rumblings and accusations suggesting improprieties and mismanagement associated with the D Block. It seems like FCC Chairman Kevin Martin’s proposal to “de-link” the D Block from the rest of the spectrum will be the strategy moving forward.

This could allow the FCC to make new rules for the sale of the public safety block. However, what is lacking at this time is the timing for a decision on de-linking the D Block as well as any timeframe for establishing new rules going forward.

As some are now expecting, the D Block will be largely debated, scrutinized and questioned. The rules will be hashed and re-hashed. Is this necessary?

Some say the FCC should let all of that go and simply agree that the overall restrictions placed on the D Block crippled it from the very beginning.

Since the FCC actually made so much money on the commercial aspect of the auction, maybe we should just allocate the D Block spectrum for nationwide public safety use and call it done!

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Source: W.N.B. Reporter.