Last spring, the Federal Communications Commission held its highly publicized 700MHz auction, the sell-off of the slice of the electromagnetic spectrum that analog television signals will no longer be using as of next February. The auction raised nearly $20 billion for government coffers, and was generally considered to be a rousing success.
The only piece of the 700MHz spectrum that did not sell was the so-called "D Block," a narrow frequency range reserved by the FCC for the development and implementation of a national emergency-responder network.
In an effort to revive interest in the spectrum, the FCC announced that it is seeking public comment on a new set of rules governing the purchase and use of the spectrum. The most significant change is the minimum bid, which the FCC reduced from $1.3 billion to $750 million for a national license.
In addition, if no single entity bids on the D Block, the new rules propose dividing the spectrum segment into 58 separate regions, which would further lessen the investment required for a company to participate. The time limit for rolling out the network was also extended from 10 to 15 years.
The FCC's concept for the D Block is that a private company will build a national emergency-communications network that will ensure that police, fire and other first responders can talk to each other. Incompatible communications devices and conflicting networks were a serious problem during the response to the terrorist attacks on 9/11.
In exchange for building the network, the private company (or companies) would earn revenues by charging emergency responders for use of the network and selling wireless access to the spectrum to commercial accounts, as well.
"Let us be clear about what is at stake," FCC Chairman Kevin Martin 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."
However, potential investors questioned whether the potential revenues would be large enough to offset the FCC's minimum bid and the cost of building the new network. The FCC projects the cost to be $6 billion to $7 billion, but potential bidders put the cost at twice that amount.
A 2009 Auction Planned
Once details of the proposal are released, the public will have 30 days to comment and offer suggestions. Chairman Martin said he hopes the commission will vote on the final D-Block auction rules by the end of the year, and then hold an auction next year.
"We -- and more importantly, public safety and the American people -- cannot afford to wait," Martin 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."