Off the auction block
Early this year, the Federal Communications Commission (FCC) sought bids for a portion of the 700 megahertz radio spectrum known as the “D Block,” which was carved out for a nationwide interoperable public safety radio network. As originally conceived, the D Block auction winner would share the spectrum with private mobile telephone companies that would pay for the right to use it whenever first responders did not need it. Revenue from the D Block auction was supposed to help fund the construction of the nationwide public safety radio network. Unfortunately, no one submitted a bid that met the FCC’s minimum price.
Many observers thought the concepts underlying the D Block auction were flawed. Rep. Edward Markey, D-Mass., noted in a March 18, 2008, press release that policymakers should review the high reserve auction price, the D Block auction rule’s legal authority for the public-private partnership, as well as the rigorous build-out requirements and penalties for failure to fulfill license conditions. On May 14, 2008, the FCC released a Notice of Proposed Rulemaking (NPRM) to solicit comments on how to improve the process for making radio spectrum available for a nationwide public safety radio network.
Among its more controversial suggestions, the NPRM invited comments on whether the proposed network should be financed with mandatory minimum payments from public safety agencies that would be required to use the network for minimum amounts of time. The NPRM also created a stir by questioning whether private financing should be used to build the network. According to the FCC, direct funding by public entities could limit potential conflicts of interest between banks, their clients and private parties seeking to build the network, although private funds have successfully financed many major public improvements.
The NPRM suggested tapping the Universal Service Fund (USF). The USF, which is funded by monthly phone bill taxes, was created to subsidize phone service for the elderly or poor, help extend telephone service to rural communities and help pay for school Internet connections. If the fund supported construction of public safety improvements, money for its original causes would decline, or USF fees would need to increase. Either option is controversial.
The NPRM also asked whether states should play a greater role in constructing the network, because they may be better able to address implementation challenges that cross jurisdictions or involve intra-jurisdictional issues. Comments filed with the FCC in response to the NPRM indicate, however, that there is no consensus on whether a greater state and local role would promote the successful development of a nationwide public safety radio network.
Curiously, the NPRM appears to back off some of the “site hardening” recommendations from a June 2006 report examining hurricane Katrina’s effect on communications networks. Agencies that would use the network in emergencies are likely to vigorously oppose any rule change that could make a nationwide public safety network more vulnerable to outages. The FCC plans to take action on the NPRM and the future of the D Block before the end of the year.
The author is an attorney and founding partner of Tarrytown, N.Y.-based Snyder & Snyder.
