Martin Plan on Public Safety D-Block Overhaul Still Unclear
FCC Chairman Kevin Martin still is not telling colleagues what he thinks the FCC should do if, as long expected, no bidder emerges in coming days with a bid meeting the $1.3 billion reserve on the 700 MHz D-block license. Commissioner Jonathan Adelstein told us Friday the FCC needs to overhaul its approach on the D-block.
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“The public-private partnership approach could have succeeded,” Adelstein said. “The way Chairman Martin set it up, though, was doomed to fail. Admittedly, finding a balance was difficult, but we failed to make it viable.” The FCC has a duty to public safety to offer a new approach, he said. “We have a special moral responsibility to act quickly to set new rules that can lead to a workable partnership,” Adelstein said. “The bungling of this effort critically delays the urgently needed nationwide interoperable broadband network, putting public safety at risk.” An agency source said, “It is high time for the chairman to dust off the bureaus’ recommendation for public safety communications from this time last year and share it with the other offices.”
Agency sources expect the FCC to study lowering the reserve for the block and perhaps adjusting the unprecedented buildout requirements. The FCC could revisit rules on the relationship between the licensee and the Public Safety Spectrum Trust. But the agency’s course near-term is unclear.
“If Martin has a plan he’s not sharing it with anyone,” said one industry official. “That’s not unusual under the chairmanship, but people are curious.” Martin has not been signaling what course the FCC will pursue for the D-block, said agency officials. The auction is expected to end within days. They expect the commission to put the proposal through a complete overhaul, they said.
Stifel Nicolaus laid out alternatives for the block in a Friday research note. These options include awarding the license to the current bidder, for $472 million, which the firm deems unlikely. The FCC could make “discrete tweaks to the D Block rules by relaxing the reserve price and build-out requirements, and quickly holding a reauction,” auction the spectrum as a commercial block, or hold an inquiry that asks “what aspects of the rules chilled interest in the license and, based on the findings, amending the structure to try to entice bidder,” Stifel Nicholas said.
Uncertainty caused by “leverage” the 700 MHz rules gave the public safety trust likely was a chilling factor, the company said. The FCC should examine whether to relax the new network’s strict buildout requirement, Stifel Nicolas said. “The current requirement that the licensee ultimately provide service to 99.3 percent of the U.S. population will likely have to be rolled back because it is so costly, but it will be a tough political call to determine how many unserved people the government will accept,” the firm said. Martin is in Thailand this week to address an ITU conference, the Annual Global Symposium for Regulators.