Cyren Call Denies Spectrum Auction Influence

No one does official outrage like Morgan O'Brien. The Nextel co-founder who sold the company to Sprint for $35 billion in 2004, on April 4 strongly denied allegations that the public safety community effectively squelched Frontline Wireless' bid in the recently concluded 700MHz auction.

Frontline made a big splash last year with its proposal to build a public/private network that would serve both public safety and consumers. The plan involved pairing 10MHz of the 60MHz spectrum up for auction and then combining that block with the 24MHz already dedicated to a public safety network.

But just weeks before the auction began, Frontline Wireless pulled the plug on the plan and closed its doors, reportedly because it couldn't raise the money for the venture. In addition to the cost of building the network, the Federal Communications Commission placed a $128 million minimum bid for the spectrum.

Ultimately, the FCC was unable to find bidders to meet the minimum bid requirements, leaving the agency back at square one for developing a nationwide public safety interoperable network.

Several weeks ago, rumors began to surface that Cyren Call, the company founded by O'Brien to serve as the agent for the public safety spectrum, wanted a front-loaded $500 million lease agreement.

To read more about the FCC's investigation into the 700MHz auction, click here.

"Anyone stating or implying that I or any member of Cyren Call or the Public Safety Spectrum Trust (PSST) 'demanded' a spectrum lease payment is lying," O'Brien said in a statement. "Furthermore, anyone suggesting that any spectrum payment would be paid to Cyren Call is lying."

O'Brien, whose spectrum wheeling and dealing over the last 20 years is legendary in Washington, made his comments after the official gag order on auction participants was lifted by the FCC.

O'Brien admitted the $500 million amount was discussed with Frontline Wireless, AT&T and Verizon, who all expressed interest in the public/private network. However, O'Brien stressed, the actual amount of the lease was subject to negotiation and FCC approval. Moreover, he said, Frontline Wireless was well aware of the condition before it submitted paperwork to participate in the auction.

"Anonymous third-party allegations that the prospect of an annual lease payment 'killed' Frontline do not stand up to scrutiny," Cyren Call said in the statement. "Whatever caused Frontline to abandon its pursuit of the D block occurred after it was well aware of and even had endorsed the PSST's partnership expectations and the FCC's reserve price."

Cyren Call pointed to several Frontline statements before the auction, including Nov. 30 comments from Frontline's Jim Barksdale that the public safety requirements "dovetail with Frontline's own business and construction plans." A week later, Frontline filed a document with the FCC stating, "We are bidding to win and build out a 4G network to meet the needs of public safety."

Both comments were made after Frontline Wireless had met with Cyren Call and PSST officials. Frontline Wireless was unavailable for comment, as it went out off business in January.

Whether the allegations against Cyren Call are true or not, O'Brien can expect a barrage of the same and more when U.S. Rep. Ed Markey, D-Mass., holds an April 15 hearing on who dropped the dime on the D block.  Rep. John Dingell, is also likely to have an uncomfortable question or two.

"I believe we must fully review the nature and authority of the public safety spectrum trust and whether this model should be retained or modified," Markey said March 18, just hours after bidding closed.