Frontline Wireless yesterday submitted proposed service rules for the 700 MHz auction that would provide public safety with some much-wanted leverage in public-private negotiations and the assurance that first responders would receive the best pricing on a nationwide broadband network built in the band.

Under the Frontline plan, 10 MHz—known as the E block—of the 60 MHz in the 700 MHz band allocated for commercial use would be auctioned to entities agreeing to operate only wholesale wireless broadband networks. The operator also would be given the opportunity to reach an agreement with a national public-safety licensee to utilize that 12 MHz of that sector’s spectrum to build a public-private network for public-safety and commercial use.

Public-safety officials have expressed concern that those negotiations might not generate an agreement desired for first-responder communications if the top E block bidder is given a license to the commercial spectrum before negotiations begin. As economists cited earlier this week in a report funded by Frontline Wireless, the business case for a wholesale operator can work using just the E block spectrum, without public safety providing spectrum or an “anchor tenant” to the network.

Given this, public-safety leaders have been worried that the E-block licensee would have little incentive to agree to some of public safety’s uneconomical desires—for example, coverage in rural areas that offer little or no profit potential—if the FCC automatically granted the auction winner its license. Instead, public-safety leaders have asked that the E-block license be granted only if the licensee reaches an agreement with public safety on the buildout of a nationwide broadband network using both entities’ 700 MHz spectrum.

In its FCC filing yesterday, Frontline Wireless agreed to this concept but stopped short of effectively endorsing the notion of public safety having “veto” power over the E-block auction. Instead, Frontline Wireless expressed support for service rules calling for the E-block licensee and public safety attempting to negotiate a deal; if negotiations cannot be completed, the FCC would serve as the mediator in a binding alternative dispute resolution (ADR) process.

“This approach avoids giving either party a ‘veto’ over establishment of the crucial, public/private network for innovation and public-safety communications, but, importantly, incentivizes the E Block licensee to reach a mutually beneficial agreement with the NPSL [national public-safety licensee] in a timely manner,” the Frontline Wireless filing states.

“This proposal also maintains the Commission’s non-delegable duty to decide license qualifications, rather than placing it in the hands of a third party, the NPSL. To allow the NPSL to decide whether the E Block license should issue to the otherwise qualified winning bidder would violate the Commission’s statutory licensing responsibility.”

In addition, the Frontline Wireless filing calls for service rules to require that public safety be granted “most favored nation” status on the public-private network, so it would be guaranteed to receive the best possible pricing arrangement in comparison to any commercial entity on the network. While Frontline officials have expressed the company’s plans to provide such cost assurances if it won the auction, the stipulation was not part of its original service-rules proposal submitted early this year.

“The Commission should require that the E-block licensee charge public safety users at rates no higher than the most favorable rates it charges commercial customers for equivalent services,” Frontline spokeswoman Mary Greczyn said in an e-mail correspondence with MRT.

Frontline Wireless remained steadfast in its belief that the E-block licensee should be a wholesale-only operator willing to comply with open-access guidelines that have been opposed by many incumbent network providers.

In its filing with the FCC, Cyren Call—a company led by former Nextel Communications co-founder Morgan O’Brien that initiated the public-private partnership debate with its proposal a year ago—acknowledged potential competition benefits to a wholesale-only approach but questioned its value to public safety.

Specifically, Cyren Call expressed concern that the wholesale-only clause would eliminate potential commercial partners for public safety—particularly incumbent wireless carriers like Verizon Wireless and AT&T Mobility (formerly Cingular)—that may be best positioned to provide such a service. Although a “wholesale only” approach could benefit Cyren Call’s chances in an auction by removing deep-pocketed incumbents from the process, forcing public safety to partner with an operator required to utilize an unproven wireless wholesale model could have negative impacts, Cyren Call contends.

“In a proceeding that already requires levels of innovation and experimentation to get this balance of a public-private partnership ‘just right,’ is it wise to add another layer of experimentation and regulatory engineering on this particular 12 MHz of spectrum?” the Cyren Call filing states.

“Since the auction will include 50 MH on which no such sharing obligations will be imposed, would it not be more prudent to experiment on some of that spectrum if the FCC decides, based on the record in this proceeding and on its own view of competition in today’s wireless environment, that the public interest would be best served by a requirement that will serve to exclude existing wireless carriers from participating in whatever role they might choose?”