FCC Mulls Airwaves Sale by Region for Safety Network

WASHINGTON -(Dow Jones)- The Federal Communications Commission, which is trying to create a national network for use by firefighters and police officers, is considering carving up a valuable block of soon-to-be-unused television airwaves and selling the parts to commercial partners by region.

But the plan is opposed by some big city public safety entities who want to get the broadcasting real estate for free.

The patchwork of licenses is intended to create a national public safety communications network, a priority since the Sept. 11, 2001 terrorist attacks. The airwaves will be freed up once TV broadcasters turn off their analog signals in February.

The FCC is expected to vote on a rule this month to set parameters for the sale, seeking input from phone companies and public safety officials who would share the spectrum. The proposal is circulating among the five-member body now and is on the agenda for a Sept. 25 meeting.

The proposed rule is intended to press commercial and public safety parties to come to agreement about how the auction should be handled.

FCC Chairman Kevin Martin said Friday that the proposal carves up the licenses into 58 regions, but it also leaves the door open for a single national bidder. The minimum amount the FCC would accept for the entire nation is $750 million.

The proposal sets varied regional prices and standards for the new network. For example, in the lowest tier - representing sparse rural areas - winning bidders would be required to build networks covering 90% of the area. In the top tier - for dense urban areas - the "build-out" requirement would be 98%.

Public safety entities disagree about whether the sale should take place at all. New York City has been the most vocal of several large cities in saying the spectrum should be handed over to states and cities to build their own communications networks as they choose.

"It should be done from the local entities up," said Charles Dowd, deputy chief and commander of the New York Police Department Communications Division. "It's clear green-space spectrum across the United States."

The FCC can't by itself hand over the airwaves to public safety officials. That would require an act of Congress.

Martin, who doesn't want to wait for Congress, will press forward with the sale to commercial partners, although he isn't wed to a particular model.

Martin said Friday that the FCC is required by law to use competitive bidding to allocate the spectrum, adding that a second sale is the best way to ensure that the freed-up airwaves won't lie fallow once they become available next year.

"We need to try to make sure we're getting the spectrum into use as quickly as possible," Martin said. "The only way to ensure that certainty is to go ahead and try to conduct another auction."

The Public Safety Spectrum Trust Corp., or PSST, which owns the license for current public safety channels, wants the new block of airwaves to be owned and operated by a single commercial entity, if possible.

"We hold one license for the whole country and we would want one partner to hold the license for the whole country," said PSST Chairman Harlin McEwen.

PSST recently made a major concession to the FCC over the spectrum auction, saying it would support regional licenses as long as the commission designated a single technology that would allow different regions' equipment to operate on other public safety networks.

The FCC has already tried to sell the block of channels to one national licensee, but that auction failed because no commercial phone companies were interested in buying the spectrum. Critics said that sale didn't work because the reliability standards demanded by public safety were too onerous, and that the FCC didn't spell out the companies' obligations to public safety.

McEwen said PSST now is willing to consider the regional licenses because it has received assurances from several phone companies, including United States Cellular Corp., that they would bid on spectrum in different regions of the country. US Cellular has proposed auctioning the spectrum on a state-by-state basis.

But industry and FCC sources say even a regional licensing scheme is risky. If the public safety standards are lowered in order to attract commercial bidders, the sale could be seen as a giveaway to big phone companies like Verizon Communications and AT&T, who could swoop in at the last moment and outbid smaller competitors.

A regional sale also could leave gaps in the national network.

"What happens if some of the regions, however they're defined, aren't purchased in the auction?" said Robert Gurss, legal and government affairs director at the Association of Public Safety Communications Officials.

"I'm worried about there being New York and Washington and San Francisco that might have really robust networks, but a lot of other areas, they're not going to have the resources to do it," Gurss said.

Martin has proposed that, once certain thresholds are met in the auction, any unsold spectrum would be given to the regions that are left out. Public safety officials in those areas then could use those channels to bargain with commercial entities about a building a joint network.

New York City has informed the FCC it wouldn't use a public safety network licensed to a commercial partner. If New York City and other areas follow through on that threat, creating a nationwide public safety network will be difficult, if not impossible, to accomplish.

"You're giving away maybe your last great opportunity to have nationwide interoperable spectrum," said the NYPD's Dowd. "It may sound unwieldy from the bottom up, but ultimately, if you don't get buy-in, it won't work."

New York City may be in a position to play hardball for now, but the FCC's latest proposal may force the city to compromise or be sidelined.

The divergent public safety groups are talking among themselves and with potential commercial partners, and people on both sides of the debate say the talks need to continue for the auction to succeed.

"There will never be complete unanimity in public safety or in the commercial sector," said PSST's McEwen.

Public comments on the FCC's rule will give the commission a hint as to whether the divergent interests can come to agreement.

Some progress has been made toward consensus. To start, people at the FCC, in the commercial sector and in the public safety arena all agree that the new network, however it is structured, will need universal equipment standards to ensure compatibility.

-By Fawn Johnson, Dow Jones Newswires; 202-862-9263; fawn.johnson@dowjones.com

(END) Dow Jones Newswires

Posted to the site on 6th September 2008