FCC Rates F on D Block

With national elections looming and a likely change of leadership at the Federal Communications Commission, perhaps Chairman Kevin Martin is worried about his legacy when it comes to an interoperable network for first responders. You may have noticed -- seven years after the Sept. 11 terrorist attacks -- we don't have one.

Martin thought he had a plan: In July 2007, as part of the FCC's 700MHz auction, the agency decided to create a public-private partnership by dedicating a 10MHz block to be paired with the 24MHz already allocated to public safety. According to the FCC plan, private investors would build a wireless network, lease access as needed to first responders and sell wireless service to commercial users for profit.

While the auction was widely successful with bidders dropping nearly $20 billion for the spectrum being abandoned by broadcasters as part of the digital television transition, no one stepped up to meet the minimum bid price of $1.3 billion for the public-private public safety network.

Martin said the FCC would re-evaluate its options for the public safety network. He publicly revealed the new, or, rather, rehashed old plan Sept. 25 with dissent coming from all corners. The highlight of the new effort is a plan to slash the minimum bid price to $750 million. The FCC also proposes to ease the build-out requirements that proved to be a sticking point in the first auction.

The FCC plan is based on its estimates that it will take $6 billion to $7 billion for the private investor to build the network. That's in addition to the minimum $750 million spectrum cost. FCC Commissioner Jonathan Adelstein said the FCC was plucking numbers out of the ether.

"It would appear some of the numbers that are suggested are based on educated guesses as opposed to solid evaluations based on independent expert analysis," Adelstein said. "Without this analysis, we have no way to determine ... whether such a large, upfront minimum bid requirement of $750 million permits a sustainable business model, or dooms this enterprise to failure from the outset."

Adelstein noted that if the minimum bid was set at $100 million, the winning bidder could put $650 million more into the public safety network. "Our first priority should be helping our first responders, not raising money," he said.

In light of the credit crunch sending Congress into a dither of plans for a Wall Street bailout, Commissioner Michael Copps wondered just exactly who was going to lend money for such a speculative venture.

"The wreck and ruin left in the wake of last week's financial meltdown only makes matters worse -- perhaps infinitely so," Copps said. "I would just as soon take my chances passing a tin cup on Wall Street as put my faith in plunging markets finding a way to pony up billions for a network whose design and business case the FCC doesn't fully understand and has not, to my mind, sufficiently investigated."

Although it's hard to find, the good news here is that the FCC is only proposing the plan and seeking public comment. Martin said he hopes to have final rules in place by the end of the year and hold an auction in 2009.