700 MHz debate moves to Capitol Hill

Less than a year after being unveiled, a plan for a public-private partnership to build and maintain a nationwide broadband network in the 700 MHz band has gained enough traction to warrant a high-profile legislative sponsor, a Senate hearing and criticism from influential opponents.

Several national public-safety organizations have expressed support for the concept of allocating 30 MHz of spectrum in the band — currently slated for auction by January 2008 — to a not-for-profit, public-safety broadband trust that would lease the airwaves to commercial operators. For building and maintaining a public-safety-grade network, the commercial operators would be allowed to sell commercial services on the network over spectrum not needed by public safety at a given time.

Presidential candidate Sen. John McCain (R-Ariz.) has announced that he will introduce legislation — probably in early March, according to Beltway sources — that would enable such a proposal, the principles of which were outlined last spring by Cyren Call Communications (MRT, June 2006).

“We are at a watershed moment where we can provide more of the 700 MHz spectrum to solve our national public-safety communications crisis and greatly enhance our emergency preparedness,” McCain said in a statement. “If we do not act now, this valuable spectrum will be auctioned off, and this opportunity will be lost forever.“

Whether the public/private proposal includes a profitable opportunity for commercial operators is a matter of contention. Cyren Call Chairman and Nextel Communications co-founder Morgan O’Brien testified during a Senate Commerce Committee hearing that he believes “with every fiber of my being” that commercial operators will want to participate, but the High Tech DTV Coalition released a report to the contrary.

In the study, Criterion Economics said the Cyren Call plan is a “shell game” with fundamentally flawed economics that would not attract interest from commercial carriers.

“[Cyren Call] says, ‘Give us $7.5 billion worth of spectrum for $5 billion, and give us another $5 billion in government-guaranteed borrowing authority, and we can do this thing without any additional money,’” said Criterion Chairman Jeffrey Eisenach. “The underlying assumption is that the commercial sector is going to fund the buildout of the network and pay the bulk of the operating costs. What we’re saying is that the commercial sector isn’t going to do that.”

Steve Largent, president and CEO of CTIA — the largest trade association for cellular carriers — reiterated this sentiment during the Senate hearing. Furthermore, Largent said the economic problems would be compounded by 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.”

But Harlin McEwen — speaking on behalf of the International Association of Chiefs of Police, APCO and the National Public Safety Telecommunications Council — said it is less realistic to assume that government entities would fund a public-safety broadband 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 taxpayers.”

Commerce Committee vice chairman Ted Stevens (R-Alaska) expressed discomfort with the notion that the public-safety broadband trust would conduct a “mini-auction” to see which commercial operators would get the right to build networks on the large swath of proposed spectrum.

“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, and we should not do it from the point of view of substance, either.”

Largent said CTIA is willing to help advise public safety on the best way to use 12 MHz of spectrum currently being considered for a public-safety broadband network during a seminar in April (see timeline). But a public/private partnership that had just 12 MHz at its disposal — compared with 30 MHz — would be significantly more difficult to achieve because there would not be enough spectrum to make both the public-safety and commercial business plans work, Cyren Call spokesman Tim O’Regan said.

“Without both aspects of that covered, the business plan will not work,” he said.

O’Regan noted that a major challenge for public/private network proponents is explaining to Capitol Hill that the proposal would not jeopardize the DTV transition scheduled for February 2009 and that no commercial entity would control the spectrum.

McEwen echoed these sentiments, noting that it will take considerable effort for public-safety officials to explain the complex public/private notion to elected officials who are being lobbied heavily by influential opponents. McEwen believes it can be done, even with the scheduled 700 MHz auction less than 11 months away,

“It’s still early in the game,” he said. “It’s going to be a short game, but it’s still early.”

Fast times at 700 MHz

Jan. 31:

Sen. John McCain says he will sponsor legislation enabling a public/private partnership for a nationwide broadband network operating on 30 MHz of spectrum in the 700 MHz band.

Feb. 8:

Senate Commerce Committee conducts a hearing primarily focused on the public/private network proposal.

Feb. 26:

Deadline for comments to the FCC regarding its proposal for a public/private partnership on 24 MHz of spectrum in the 700 MHz band already earmarked for public safety.

March 12:

Deadline for reply comments to the FCC regarding its 700 MHz proposal.

April 9:

CTIA to host a seminar regarding public-safety networks in Washington, D.C.

Jan. 28, 2008:

Under current law, the deadline for the FCC to begin auctioning 700 MHz spectrum.