A Senate Commerce Committee hearing yesterday focused largely on Cyren Call Communication’s proposal saw members raising concerns about the economics and governance of the public-private plan to build a nationwide, public-safety broadband network on 700 MHz spectrum now earmarked for auction.

Cyren Call, led by Nextel Communications co-founder Morgan O’Brien, has proposed that 30 MHz of the 60 MHz of spectrum in the 700 MHz band scheduled to be auctioned by January 2008 instead be allocated to a public-safety broadband trust. The trust would lease the airwaves to commercial operators agreeing to build and maintain public-safety-grade broadband networks nationwide.

Operators would be able to offer commercial services using the network, but public safety would be able to pre-empt those users whenever it needed capacity. Sen. John Thune (R-S.D.) questioned whether such an arrangement would generate profits a commercial carrier needs to survive.

“Would a customer choose a provider that could be pre-empted at any time by public safety?” Thune asked.

Steve Largent, president and CEO of wireless trade association CTIA, said that issue is compounded by a larger issue regarding the public-safety trust: dictating coverage requirements to a for-profit commercial provider.

“The commercial operators are asking us, ‘How we can get a return on our capital if we are coerced—forced—to build towers in rural South Dakota, where there is no return on our investment?’” Largent said. “Is this trust going to force us to build towers there because we build out in New York, and we’ll just take the [profit] from New York and use it to build in South Dakota? I just don’t think that’s realistic.”

O’Brien, who previously has said he has received interest from unnamed providers willing to participate in this project, said he is confident the business model will work, although the providers may not come from CTIA’s membership.

“With every fiber of my being and all my experience, I am sure that numerous commercial operators … and entrepreneurs will step up for the right—for the privilege—of participating in that network. Obviously, I can’t prove it, … but all of my experience raising money on Wall Street and all of my experience operating networks suggest … that is exactly what will happen.’”

Another source of concern regarding the Cyren Call proposal was the manner in which the trust would lease spectrum in what Harlin McEwen—speaking on behalf of the International Association of Chiefs of Police, the Association of Public-Safety Communications Officials and the National Public Safety Telecommunications Council—acknowledged to be a “mini-auction.”

Even after O’Brien said the FCC would treat the proposed public-safety broadband trust like any other licensee, committee vice chairman Ted Stevens (R-Alaska) expressed discomfort with the notion.

“Respectfully, Mr. O’Brien, no matter what you say, you’re asking us to create a new subdivision of the FCC, giving complete control of 30 MHz of spectrum,” Stevens said. “To me, that is impossible for us to do fiscally or we should not do from the point of view of substance, either.”

Largent said Congress and the FCC should support dedicating 12 MHz of the 24 MHz already allocated to public safety in the 700 MHz band to a nationwide broadband network for first responders, noting that the $1 billion currently earmarked for interoperability is “just a down payment” on a nationwide network.

But McEwen said the problem is the lack of funding for public safety to build and maintain such a network.

“We have no money to build a nationwide network,” he said. “Commercial people offer us no model other than to come back to [Congress] to pay for it. [A public-private partnership] is a great way to take it off the backs of the taxpayer.”

A public-private partnership such as the one envisioned by Cyren Call could create a sustainable model, but 12 MHz is not enough spectrum to share and still provide enough commercial opportunity for the network operators, McEwen said. McEwen also contested arguments from wireless industry representatives that public safety already has enough spectrum for its communications.

Largent said the wireless industry is willing to help public safety use the 12 MHz of spectrum more efficiently and wants to discuss the matter during an April seminar in Washington, D.C. Stevens said the meeting should be used to discuss immediate interoperability needs.

“I think this conference could step out of the box and stop talking about who gets spectrum and start talking about how we can meet the needs of these first responders now,” Stevens said. “I urge you to go to that conference and talk about interoperability solutions, not allocation of spectrum.”

David Billstrom, chairman and CEO of National Interop, said software-based radio-over-IP (ROIP) solutions from companies like Twisted Pair and Cisco offer immediate interoperability packages at a fraction of the cost of hardware-oriented solutions. While deploying statewide radio systems in all 50 states would cost $50-100 billion, ROIP could be deployed nationwide for $300 million.

Charles Werner, representing APCO and the International Association of Fire Chiefs, said changing the current public-safety communications model is critical, noting the fact that even new public-safety communications equipment is “obsolete” upon deployment, because it takes so long to move a project through governmental systems.

“We need to change this paradigm before government spends billions more,” he said.