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February 09, 2008

700 MHz: D block fiasco leaves public safety network in limbo

In the MRT Bulletin, Donny Jackson opines on the stalled D block auction and its impact on the public safety network its meant to support. But first, he speculates on the majors players in the other blocks:

Because of the FCC's anonymous-bidding rules for this auction, we don't know the identities of the high bidders to this point. Of course, that hasn't prevented analysts from speculating that AT&T Mobility is very active in the A and B blocks that are adjacent to spectrum it purchased from Aloha Partners before the auction, that Qualcomm is the leading bidder for the unpaired E Block and that Verizon Wireless trumped a bid from search-engine giant Google for the C Block.

But Google can claim a victory, since the open access rule took effect as the bidding pushed past the reserve price.

For the D block, the question is should the FCC simply accept the single $417 million bid and face the wrath of the bidders who question the fairness of the auction since the public-private partnership terms seemed to be customized for Frontline, a company that closed down before the auction started, or reauction this block after revising the rules stipulating the obligations of the winner?

Of course, a reauction also means a delay in the beginning of potential negotiations between the Public Safety Spectrum Trust (PSST) and the D Block winner. During this time, there's sure to be lots of fingerpointing -- at the FCC for pursuing the public-private partnership idea, at the PSST for releasing a bidder information document that scared off potential bidders and at Congress for focusing spectrum auctions on revenue generation, which forces the FCC to adopt reserve prices.

Jackson speculates that this decision could be pushed into the next presidential term which might mean a new FCC Chairman replacing Kevin Martin, further complicating the resolution of this matter, and leaving the bidders' investors wary.

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