As for the D Block, which received a single $472 million bid from Qualcomm Inc. in the opening round and eventually fell far short of the $1.3 billion reserve price, the Federal Communications Commission said it has decided not to immediately re-offer the D Block license and will “consider additional options for that spectrum.”
But no decision is likely soon. A firestorm of controversy is about to be unleashed.
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A coalition of consumer and public-interest groups asked the FCC to probe the 700 MHz auction’s failure to attract a winning bidder for the national commercial/public-safety D-Block license, an outcome of growing interest to Congress.
“In particular, PISC asks the commission to investigate carefully the allegations surrounding a purported meeting between Frontline [Wireless L.L.C.], its financial backers, and Morgan O’Brien of Cyren Call [Communications Corp.] that may have had the effect of preventing Frontline from attracting needed capital and discouraging other bidders,” stated the Public Interest Spectrum Coalition in a letter to FCC Chairman Kevin Martin.
Martin said he asked the FCC’s inspector general to investigate the allegations.
PISC members include the Consumer Federation of America, Consumers Union, EDUCAUSE, Free Press, Media Access Project, National Hispanic Media Coalition, New America Foundation, Public Knowledge and U.S. Public Interest Research Group. The organizations also want the FCC to explore alternative uses of D-Block spectrum, such as fostering broadband competition and deployment.
The allegations regarding Cyren Call Chairman O’Brien and Frontline were made in some news reports, citing unnamed sources, as well as by Harold Feld, senior VP of Media Access Project, in a blog on the Web site Wetmachine. The Feld blog was posted the day before the Jan. 24 start date of the 700 MHz auction. Feld said his views do not necessarily reflect those of MAP.
Two weeks before the auction kicked off, Frontline, a Silicon Valley-backed startup led by high-profile telecom policymakers that lobbied aggressively to compete for the D Block, shut down without explanation.
Tim O’Regan, a spokesman for Cyren Call, said the company could not comment on the issue because the 700 MHz auction’s anti-collusion gag rule is still in effect. The same rule applies to now-defunct Frontline. Harlin McEwen, chairman of the Public Safety Spectrum Trust, declined to comment due to the gag rule, despite issuing a lengthy statement on the D Block shortly after the auction ended.
The PSST is the public-safety broadband entity licensed by the FCC to partner with a commercial D-Block licensee. Cyren Call is PSST’s official adviser, and has been funding the public-safety trust with at least one loan financed by Cyren Call’s financial backers.
Congressional attention
The D Block imbroglio has not escaped the attention of Congress.
House telecom subcommittee Chairman Edward Markey (D-Mass.) said a hearing will be held on the abandoned D Block. Late last November, Rep. Henry Waxman (D-Calif.), chairman of the House Committee on Oversight and Government Reform, asked Martin to respond to a series of questions and produce documentation on, among other things, the relationship between PSST and Cyren Call. The FCC and the committee have declined to date to release Martin’s response to Waxman. However, a committee source said the panel is continuing its investigation into the matter.
“It is my hope that the commission quickly closes out the auction and makes public information about winning bidders before coordinating with Congress on developing a thoughtful plan to re-auction the D Block,” said House Commerce Committee Chairman John Dingell (D-Mich.). “The construction of a nationwide, next-generation, interoperable broadband network for public safety is a crucial policy objective, and the need for such a network has not diminished.”
