FCC Plans New Auction for First-Responder Airwaves

Washingtonpost.com

By Cecilia Kang

Washington Post Staff Writer

September 6, 2008

New details on a plan to create a national communications network for police, fire and other emergency first responders were announced yesterday by the Federal Communications Commission after an earlier effort to sell the network this year failed to produce a buyer.

Under the new proposal, the network would be auctioned as one national block of radio spectrum or, alternatively, as 58 separate regional airwaves licenses. The agency said that it prefers to sell the spectrum as a whole and that it would give priority to such a bid. But if no one meets the minimum reserve price for the national block, the commission would close the auction with a minimum of half of the 58 regional licenses sold.

The creation of an interoperable public safety network, whereby police could trade video and calls with fire crews and federal law enforcement around the nation, has been pushed by Congress and the FCC after communication problems plagued emergency crews during the attacks on the World Trade Center on Sept. 11, 2001, and during the floods following Hurricane Katrina in 2005.

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In March, the FCC set aside a chunk of spectrum in an auction of valuable 700-megahertz airwaves for public safety officials. A commercial partner would purchase the spectrum in the auction and share it with first responders during emergencies.

The public safety block was the only chunk of spectrum that didn't sell in that auction, receiving only one bid, well below the minimum reserve set by the FCC. The other blocks produced about $19.6 billion in bids that go to the U.S. Treasury, with the country's largest wireless carriers -- AT&T and Verizon Wireless -- strengthening their lead in the industry when they emerged as the biggest winners.

Critics pointed to the lack of competition -- a key goal of the sale -- as another failure of the auction.

In a conference call with reporters yesterday, FCC Chairman Kevin J. Martin acknowledged that it may be easier for the largest national carriers to buy and build the public safety network because they already have facilities in place across the nation.

"We want someone to build out a public safety network and solve the interoperability problem," Martin said. "My priority is less about the impact on competition."

The failure of the auction raised questions about the nonprofit group representing emergency responders, the Public Safety Spectrum Trust, and its advisory firm, Cyren Call. Cyren Call had proposed to potential bidders that PSST lease spectrum for $500 million over 10 years from a winning bidder. Consumer groups and analysts said such a large fee deterred potential bidders. Analysts also pointed to the high minimum reserve price, $1.3 billion, as a deterrent.

To attract bidders in a new auction, Martin said yesterday that the minimum price to bid on the network would drop by nearly half, to $750 million. The deadline to build the network would extend to 15 years from 10 years, and any lease charges from public safety officials would be capped at $5 million a year.