In its attempt to enter the 21st century of telecommunications technology, the public safety community, figuratively speaking, shot itself in the foot in the spectrum auction recently ended by the Federal Communications Commission (FCC). As a result, the effort to modernize public safety communications was severely hobbled.
For decades, public safety has been a fiefdom unto itself. Local agencies owned their own spectrum and used it as they wanted, even if the agencies couldn’t talk to each other when it counted. Their world revolves around portable radios and never mind new-fangled technologies like broadband or the Internet.
So when the FCC decided to open up the 700 MHz auction and give public safety a chance to use it, the internecine politics of the sector took over and everybody got greedy. The spectrum promised a paradigm shift, to a national, powerful network into which local agencies could tap. But making that shift actually happen is now much harder after the auction than it was before, so much so that it puts the concept of a hybrid network, serving both a commercial service provider and public safety, into jeopardy.
In an auction in which a record amount of money was raised, the so-called “D block” which contained the shared public safety/commercial service was totally ignored, except for a non-serious bid by Qualcomm that was far below the reserve price set by the FCC. The reasons are of the public safety community’s own making, along with their allies, Cyren Call. They set conditions before the auction took place which no commercial company in its right mind would even think about meeting.
Put yourself in the place of a potential bidder for the D block spectrum. You talk into a bidder’s meeting with the Public Safety Spectrum Trust, the group that grabbed negotiating rights for first responders, last November 30 in Denver. At a minimum, it will cost you $1.4 billion just to get in the game, as that was the reserve price the FCC put on the D block. Then you’re looking at millions more to construct the network that would serve both your commercial service and the public safety side.
Then you start looking through the 32-page bidders document that the public safety group had put together for your consideration. They outline the network architecture they want, they define their needs as the “priority” services for the network, they “own” the public-safety customers and will have control over the public safety side of the network. On top of that, the document said that the commercial partner couldn’t recover its costs to construct the network in fees it charges to public safety agencies, and could recover only a limited selection of operating costs.
And there’s more. The commercial partner in this venture would be required to make an up-front cash payment to the commercial partner every year as “rental payment” for the spectrum. And more. The commercial company wouldn’t be allowed to launch its public service in any market if the public safety side isn’t ready to go in that same market. All together, public safety put the price tag for the commercial company would be $50 million per year for 10 years.
And on top of that, if negotiations between the commercial company which won the auction and public safety later fell apart, the commercial company would have to forfeit 10 percent of its winning bid. Is it any wonder that no commercial declined to bid? Who in their right mind would have? With the risk of losing $100 million or so in a failed negotiation with a well-entrenched lobby that wants to hold all the cards, the companies were smart to stay away.
This is how the Wilmington, Del., News-Journal sized up the situation: “Something stinks about the recent Federal Communications Commission auction to build wireless networks for the nation's emergency responders. The short version appears to be that a nonprofit group, the Public Safety Spectrum Trust, hired by the nation's 55,000 public safety agencies, was trying to shake down the companies that won the federal airwaves auction. The shake down money was allegedly headed for the fire and police agencies.”
On one hand, public safety had every right to come into a potential negotiation asking for the moon. On the other hand, it wasn’t very smart because it scared away the people who could do the most for it and did so in a way that tarnished the reputation of first responders and public safety.
Now it will be up to the FCC to try to put something together. Even with public safety as an “anchor tenant,” it’s not a certainty that the hybrid network would work, “anchor” being the key word here in a couple of interpretations. The FCC should start looking for other solutions. It could find other spectrum, leverage what public safety has now, or try to step in to moderate the public safety requirements. It could put the D block back on sale with wholesale access and open devices and applications in an effort to make up for the failure to create new competitors in the C block.
Chairman Martin, Commissioner Copps and a number of FCC staff had a little chat with the public safety community on March 24. They probably should have had that discussion earlier in the process. It would be nice if they talked a little sense into them, for their own good and for ours.