Wireless Spectrum: Roadblocks

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The FCC approved a draft proposal cutting to $750 million a prior $1.3 billion minimum bid and easing other requirements, subject to public comment, devised by agency Chairman Kevin Martin. The aim is to lure commercial interest in the airwaves, which come with a requirement to partner with public safety agencies during emergencies. The airwaves are being vacated as television broadcasters move to digital signals early next year.


Investors were unwilling to meet the government's original minimum price for the D block spectrum, considered valuable because its signals go long distances and penetrate thick walls.

The government auctioned off nearly $20 billion worth of 700 MHz spectrum earlier this year, with AT&T Inc (T.N: Quote, Profile, Research, Stock Buzz) and Verizon Communications Inc (VZ.N: Quote, Profile, Research, Stock Buzz) the biggest winners.

The companies have complained about several aspects of the FCC's approach. Verizon and AT&T both want the spectrum to be sold in pieces from the start and Verizon has suggested public safety partners choose their commercial partners.

The current proposal favors a national bidder, which Martin said would ensure the greatest coverage area.

Leading Democrats in Congress and a leading public safety group back the national approach. Local officials, including those in New York City, have suggested that cities be given the spectrum directly and want more control dealing with whichever commercial group emerges as the licensee.

Martin said if a consensus of commissioners agreed on lowering the minimum bid, he might be open to the idea. Martin wants the commission to vote on a final rule by year end.

Several commissioners cited the nation's financial turmoil as the basis for their skepticism over whether the proposal would attract bidders.

But Martin said the need for airwaves for public safety officials is still urgent, no matter what is going on with the economy, citing natural disasters and the overhang of a potential terrorist attack.

"We can't afford to continue to just wait forever ... It's been seven years since 9/11," Martin said. "I think it's important to make this valuable piece of spectrum available to the marketplace in a timely manner."

The FCC is seeking public comment as part of its rulemaking process. A final vote by commissioners is needed to approve the rule.

(Editing by Phil Berlowitz, Gerald E. McCormick, Gary Hill)

This article was originally published on 2008-09-26
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