Rep. Jane Harman (D-Calif.) yesterday introduced legislation that would authorize as much as $2 million in grants to the 700 MHz public-safety broadband licensee—currently the Public Safety Spectrum Trust (PSST)—during 2009 and 2010 to pay its operating costs incurred while pursuing a public-private partnership with the winner of the D Block auction for a nationwide network.

“The D block auction is our best chance to solve the interoperability crisis that will plague our response to the next natural disaster or terrorist attack,” Harman said in a prepared statement. “Congress should act now to ensure its success.”

The proposed legislation calls for Congress to authorize $4 million to the FCC during the two-year period to take actions that promote a nationwide network. The FCC could grant as much as much as $1 million per year to the public-safety broadband licensee to fund the licensee’s operational expenses.

PSST officials repeatedly have acknowledged that operational funding is a significant issue for the organization, which has no tangible assets other than a license for 10 MHz of nationwide spectrum in the 700 MHz band. While that spectrum is valuable, it cannot be used for revenue generation until the PSST reaches a network-sharing agreement with the winner of D Block spectrum that is expected to be reauctioned later this year.

To date, the PSST has used a $4 million loan from Cyren Call—the PSST’s adviser, led by former Nextel Communications co-founder Morgan O’Brien—to pay its operational costs. PSST Chairman Harlin McEwen testified before a House subcommittee that the PSST would not be able to repay the loan if it did not reach a network-sharing agreement with the D Block winner that would provide a revenue stream.

Several members of Congress have expressed concern about that financial arrangement, questioning whether the PSST can serve as an independent, non-for-profit representative of the public-safety community when it is being advised by its lender.

McEwen has said the PSST needs such an arrangement unless it gets money from Congress, because the organization will incur expenses fulfilling its FCC-mandated responsibilities of overseeing the relocation of 700 MHz narrowband public-safety systems and preparing for negotiations with the eventual D Block winner. In a prepared statement, McEwen said “no member of Congress has worked harder than Congresswoman Harman” to help create a nationwide network for public safety.

“We look forward to working with Congresswoman Harman and other members of Congress to share our view of the appropriate role for the PSST in the public-private partnership, consistent with PSST’s obligations to the public-safety community,” McEwen said in his statement.

However, many observers noted several potential problems with the bill, the most notable being that it is highly unlikely that Congress will approve a new spending bill in such a tight budget year as most of its members are seeking re-election. In addition, many question whether $1 million per year would be enough money to fund the PSST’s operational expenses.

Another possible issue in the bill is a clause that states that the PSST would “have no participation in its management by commercial entities or interests.” While Cyren Call’s role as PSST adviser has been questioned by many on Capitol Hill, it is not clear whether it would be considered part of the PSST’s “management” under the bill, although sources noted that the language is the same as the FCC used in its original order.