FCC 700 MHz Spectrum Auction Update: D-Block [19:10]

Intro: In this podcast we continue discussion on the in-progress FCC 700 MHz spectrum auction, with a focus on the D-Block public safety piece.

Mike: Gordon, can you give us a little background on the auction?

Back in 2005 Congress passed a law that requires all U.S. TV stations to convert to all digital broadcasts and give up analog spectrum in the 700 MHz frequency band. This law will free up 62 MHz of spectrum in the 700 MHz band and effectively eliminate channels between 52 and 69. This conversion, which has a deadline of February 18, 2009, has freed up spectrum that is being split up by the FCC into five blocks:

• A-Block - 12 MHz, split up into 176 smaller economic areas
  
• B-Block - 12 MHz, split up into 734 cellular market areas
  
• C-Block - 22 MHz, up into 12 regional licenses
  
• D-Block - 10MHz, combined with approximately 10MHz allocated for public safety, a single national license.
  
• E-Block - 6 MHz, split up into 176 smaller economic areas

Each Block has a reserve price set by FCC and if a reserve price is not met in the auction, the FCC will end up re-auctioning that piece of spectrum.

Mike: I know we discussed the auction a few weeks ago and not much has changed. Can you give us an update on where the auction is today?

Bidding round 102 came to a close yesterday afternoon with $19,524,595,900 (last week the auction finished at $19,450,389,100 - it is slowing) in total provisionally winning bids. Things have slowed considerably with only 40 new bids placed in round 102. For reference, on Thursday, each round averaged about 50 new bids.

Most active in the final round yesterday were E-Block licenses in the Bismark, North Dakota and Rapid City, South Dakota areas along with B-Block licenses in the southeastern United States.

The public safety D-Block still has not had a bid since the first round and will end up being re-auctioned by the FCC.

This may end up being the last week (an FCC decision but I'm thinking so). After the auction is closed the FCC will announce the winners.

Mike: Let's talk specifically about D-Block, the public safety piece. What's happened - why are we not seeing any new bids?

I think you have to go back and look at the history of D-Block. Early on it appeared Frontline Wireless would be one of the biggest bidders for D-Block spectrum - the company was setup for D-Block and had worked closely with the FCC on putting together specifications for the spectrum. Frontline built a formidable team including Vice Chairman Reed Hundt, who served as Chairman of the FCC between 1993 and 1997. The business plan, the organization, the technology seemed to all be in place........ On January 12 the company placed the following statement on their website:

Frontline Wireless is closed for business at this time. We have no further comment.

Another company, Cyren Call also looked like they were planning to bid on the D-Block Auction but did not.

Mike: So what happened?

Rumor has it Frontline could not attract enough funders - it seemed like a good investment - or at least you may think so up front. Many are now asking if the FCC's approach to solving the public safety inter-operability problem is in trouble. At the same time many are also asking "Is there a better way?"

I've always liked the idea of public-private partnerships and we've seen them work in times of disaster - last August I wrote here about the Minneapolis I-35 bridge collapse tragedy and how within minutes USI Wireless opened their subscription-based Wi-Fi service so anyone could use it for free. US Wireless didn't just stop there - because the network had only been built around part of the disaster, the company installed additional Wi-Fi radios in areas surrounding the catastrophe to blanket it with signals, providing an additional 12 megabits per second of capacity to the area around the bridge collapse.

A national network built from scratch may be too big of a bite though.

Mike: So what are we looking at for a solution?

Last month I had an interesting conversation with Rivada Networks’ Senior Vice President for External Affairs John Kneuer about emergency responder communications and the FCC Spectrum Auction.. Rivada uses existing cellular networks and commercial off-the-shelf technology to deliver high-speed voice and data services over a network that can survive natural or man-made disasters. I like the idea of using the existing commercial infrastructure for public safety for lots of reasons.

State homeland security officials have struggled for years with the inability of local emergency responders to communicate with each other and their federal counterparts during disasters. This inter-operability problem is so serious it has been identified as the number one concern of state homeland security officials in the National Governors Association 2007 State Homeland Security Directors Survey. Here's a quote from the report:

Public safety interoperable communications once again topped the list of homeland security advisors’ concerns in 2007 as states continue to work to ensure that first responders from various agencies, jurisdictions, and levels of government can speak to each other during emergencies or at the scene of a disaster. Increasingly, the campaign for interoperability has expanded beyond voice communications to encompass data and video interoperability as well.

Mike: How does this system work?

Rivada uses existing cellular networks and commercial off-the-shelf technology to deliver high-speed voice and data services over a network that can survive natural or man-made disasters. Right now Rivada is working with National Guard units in 11 states (Alabama, California, Georgia, Hawaii, Illinois, Louisiana, Massachusetts, Pennsylvania, Rhode Island, Texas, and Washington). These units are installing new communications systems for voice and data services over a network that uses existing commercial infrastructure. Not relying on a single network makes a lot of sense when you consider communications survival during natural or man-made disasters.

According to a Rivada press release, the Louisiana Army National Guard decided last year to adopt their interoperable public safety communications system for the following reasons:

• Is available today,
• Does not require new spectrum allocation or depend on federal spectrum auctions or mandates, and
• Offers far greater range and capability at a fraction of the cost of other existing or planned technologies.

Rivada also supplements existing technology and infrastructure as needed by:

• Building new towers in areas without sufficient commercial infrastructure;
• Employing Rivada Interoperable Communications Extension Systems (ICES) – “fly-in? units capable of being deployed within hours – where existing infrastructure has been degraded or destroyed;
• Using proprietary backwards-compatible technology to provide full interoperability between cell phones, PDAs, laptops, landlines and traditional ‘walkie talkie’-type Land Mobile Radio (LMR) systems; and
• Combining all of these elements into an efficient network architecture.

Mike: Who would these leasing agreements be with?

Right now Rivada is not saying who they are making leasing agreements with but it seems like a safe bet to assume Verizon, Sprint and AT&T will be involved - it would be good revenue along with PR and advertising for the companies. In terms of the public safety personnel it makes a whole lot of sense because they would be able to use their day-to-day wireless devices in emergency situations.

The providers would build out, maintain and update the infrastructure....... I'm liking this kind of solution.