September 17, 2009, 4:37 PM — Federal Communications Chairman Julius Genachowski told Congress today that the FCC would have a new plan for auctioning off a key piece of public safety spectrum by February 2010.
Speaking before the House Energy and Commerce Subcommittee today, Genachowski said that plans for the spectrum, commonly referred to as the "D block" on the 700MHz band, are part of the FCC's emerging national broadband plan due to be delivered to Congress next year. Genachowski would not provide any further details on what form a new auction for the D block would take and only said that the commission was working diligently to get the block on the market.
"The challenge is in getting this right and we don't want to rush into failed auction," he said. "The D block comes up often in connection with our broadband plan but don't have anything concrete right now."
The FCC had originally tried to auction off the D block as part of its auction of spectrum on the 700MHz band last year. But while the total spectrum bids for the 700MHz band nearly doubled congressional estimates of $10.2 billion, no bidder met the reserve price for the D block, which was originally reserved for the construction of a high-speed public safety network that would bring America's emergency response system up to date with next-generation technology. When the auction ended, the top bid for the D block was less than half its $1.3 billion reserve price.
In the weeks leading up to the auction, analysts at the Yankee Group predicted that the "horrendous" ownership costs of the block, whereby prospective licensees would be responsible for building out a national public safety network with 75% population coverage within four years of getting the license, would deter companies from making significant bids on the spectrum.
Frontline Wireless, a start-up carrier that had planned to bid aggressively for the public safety block, announced that it was shutting down its business just weeks before the 700-MHz auction began. With Frontline out of the picture, the D Block received only one significant license bid, and the fate of the spectrum has been in limbo ever since.
