Jan 31, 2008 3:23 PM, By Donny Jackson

ORLANDO--The Public Safety Spectrum Trust (PSST)—the national licensee for public safety’s 10 MHz of 700 MHz broadband spectrum—has finalized a contract with Cyren Call Communications to serve as its adviser and secured financing to fund the non-for-profit organization through the 700 MHz auction.

PSST Chairman Harlin McEwen revealed the deals while serving as a panelist during two sessions here at the Association of Public-Safety Communications Officials (APCO) Winter Summit. When asked about the PSST’s financial situation, McEwen said the 15-member PSST board last week approved a formal agreement making Cyren Call—headed by former Nextel Communications co-founder Morgan O’Brien—the public-safety organization’s adviser. At the same meeting, the PSST board named McEwen as its interim CEO, McEwen said.

One of Cyren Call’s first responsibilities was to secure funding for the PSST, which has no method for generating revenue until it signs a network-sharing agreement with the winner of the D Block auction. McEwen said venture capitalists have agreed to fund the PSST through the auction.

“Those negotiations were completed this past week,” McEwen said. “I signed the papers on Monday, and we have the loan to pay for our initial costs to be able to operate as a not-for-profit corporation.”

McEwen said this financing arrangement is a short-term deal that secures funding for the PSST through the auction, which is expected to conclude in March. After the auction, the PSST will have a better idea what its funding needs will be for the months beyond the auction.

“The point is, if you were an investor, to invest on the possibility of a D Block winner and the fact that we would be moving forward is a reasonable investment. If that doesn’t happen, of course, then we don’t know what we’re going to do next,” McEwen said. “We would not want to borrow money clear into the future, not knowing where that’s going to go.”

Indeed, if the auction produces a D Block bid that exceeds the $1.3 billion reserve price set by the FCC, the PSST would have six months to negotiate a network-sharing agreement with the D Block winner. However, if the FCC’s reserve price on the spectrum is not met, several potential scenarios—a reauction, new FCC rules or even potential litigation—could impact the PSST’s future funding needs.

“All I’m saying is that we don’t have the funds to be able to plan for a whole year when we don’t know what’s going to happen in the auction,” McEwen said. “It would be foolish for us to do that.”

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