September 25, 2008, 5:08 PM — The FCC has proposed new rules for auctioning a block of spectrum intended for police and fire departments -- with many of the rules similar to the first failed attempt at selling the spectrum.
The proposal the FCC approved Thursday would again auction the so-called D block of spectrum to a private company, which would be required to build a nationwide voice and broadband network shared by public safety agencies and a commercial service. In an auction of the 700 MHz band of spectrum early this year, the D block failed to get the minimum bid of US$1.3 billion set by the FCC.
The new proposal, which will be available for public comment, would allow the spectrum to be sold in 58 regional pieces or in one nationwide block. The FCC proposed a new minimum bid of $750 million for the entire 10 MHz of spectrum, which would be paired with another 10 MHz controlled by the Public Safety Spectrum Trust (PSST), the nonprofit group of public safety agencies.
But the FCC also asked for comments about whether the minimum price should be lowered. During the 700 MHz auction, which ended in March, the FCC received one $472 million bid for the D block. The winner of the spectrum would also have to spend billions of dollars to build the network.
Commissioner Jonathan Adelstein expressed doubts about the new proposal. An attempt to put together a similar auction to the one that failed is "fraught with difficulty," he said.
The proposed $750 million minimum bid is not based on "solid economic or technical" analysis of the value of the spectrum, or on the cost to bidders for building the network, Adelstein added.
"We are offering for sale a valuable asset, but not one of unlimited value," he said. "And we are expecting major investments to be made by private enterprise to meet the needs of public safety. Despite these hurdles, we have not undertaken to assess whether the costs we are asking the private sector to bear have any relationship to the returns it can expect."
The proposal would set the cost of monthly service for each public safety worker at $48.50, and some public safety agencies may not be able to afford those fees, added Michael Copps, a commission member. "A network that is too expensive for first responders to use is little better than no network at all," Copps said.
But commission Chairman Kevin Martin said the FCC has few other choices than a partnership between public safety agencies and a private network operator if it wants a nationwide public safety network.
Let us be clear about what is at stake," he said. "Without the partnership, there are no other viable tools for the commission to ensure that this network can be built in a timely manner, with a maximum level of interoperability for use by all public safety entities small and large, rural and urban."
The U.S. Congress has not agreed to fund the nationwide network, making a public-private partnership the only real option, added commission member Robert McDowell.
U.S. lawmakers began pushing for a nationwide public safety network after the Sept. 11 terrorist attacks on the U.S. Many police and fire departments responding to the airplane crashes that day could communicate with each other because they were using a wide variety of radio equipment that operated on different blocks of spectrum.
It may not be the best time for an auction because of the shaky U.S. economy, but the public safety network needs to be built, Martin said.
"We -- and more importantly public safety and the American people -- cannot afford to wait," he said. "In the seven years since 9/11 we have experienced enormously destructive hurricanes and tornadoes and deadly bridge collapses. Fortunately we have not experienced another terrorist attack. Simply put, we cannot afford to wait until we do."
