Plans for Public-Safety Wireless System Jeopardized (NewsFactor)

Even though Frontline Wireless this week announced it is "closed for business," FCC Chair Kevin Martin said Wednesday that he is hopeful a solution for a national public-safety wireless network would be found.

Frontline Wireless had proposed an innovative cellular network both for public safety and for private industry, but the company failed to post the required $128 million bond to participate in the auction. Fronline was founded by former FCC Chair Reed Hunt and had backing from leading Silicon Valley venture capitalists John Doerr, James Barksdale, and K. Ram Shiram.

The FCC has set the entry price for the spectrum at $1.4 billion. Even with a 25 percent discount for Frontline Wireless, the price proved too high. The $1.4 billion entry fee would be just the start because the winner of the auction would spend billions more building out the network. Additionally, because the network would be used by fire and police personnel, the FCC is requiring a rapid build-out.

"We are still hopeful there will be someone who will emerge as being willing to take on this challenge," the FCC said in a statement.

MIGHT TAKE NEW MODEL

Speaking at a conference sponsored by Rev. Jesse Jacksons Rainbow/Push Coalition in New York, Martin said that the auction for that spectrum would continue. "Well have to see," he said. Many observers have expressed doubt that other companies are willing to pony up the billions for spectrum that comes with stringent rules.

"Its certainly possible the FCC may have to reevaluate things and develop a new model for using this spectrum," said FCC Commissioner Michael Copps in a statement.

"The really important thing for America is that we find some way to improve the tools available to our nations first responders," Copps said. "Were six and a half years past 9/11 and we still dont have a national, interoperable broadband wireless network for public safety users."

John Kneuer, a former head of the National Telecommunications and Information Administration and currently an executive with Rivada Networks, said in an e-mail that Frontline Wireless failure is "not necessarily bad news for public-safety communications, because robust, reliable solutions that dont rely on the D Block auction are commercially available today."

FCC GOT IT HALF RIGHT

"The FCC got it half right," he said. While public-private partnership for public-safety communications is "exactly right," he offered, it makes more sense for the agency to "promote the sharing of existing commercial infrastructure with public safety." He called such an approach "vastly better than establishing one carrier with uncertain commercial prospects as the national public safety network."

Public safety is "far too important" for a monopolist approach, Kneuer went on to say, because any given company may fold or decide it is no longer interested in operating the network.

Analysts expressed doubt about whether any other companies will step up and fill Frontlines shoes. Stifel analyst Blair Levin told USA Today that auction rules giving public safety officials final say on technology choices make operating the public safety network unattractive.

If no other players step forward, the FCC might set up another auction for the spectrum without public-safety requirements. Levin said that would make the spectrum attractive to the big phone companies, who could afford to abandon it if they dislike whatever new rules the FCC propagates.