No need to jump off the ledge just yet
With the news this week that Frontline Wireless has closed up shop — at least for now — worry, if not panic, undoubtedly is coursing through the public sector. Frontline was expected to be among the bidders for the 10 MHz D Block spectrum that would be paired with an additional 10 MHz of public safety spectrum to provide the backbone for a nationwide first-responder broadband communications network.
Now Frontline appears to be out of the picture, and public-safety officials never have been overly confident that other bidders — such as major carriers like Verizon Wireless and AT&T Mobility, which are considered the most likely alternatives — will emerge. If no entity bids, the spectrum eventually could be diverted to other uses and the dream of a network that will give those who serve and protect the same kinds of advanced applications that the nation’s teenagers take for granted would die.
Given what’s at stake then, I can understand the knee-jerk reaction to fret, but I don’t believe the public-safety sector has as much to worry about as it might think. Here’s why:
For starters, Frontline was ill-suited for the task at hand. Though it had smart and capable people at its helm — including CEO Haynes Griffin, founder of Vanguard Cellular and past chairman of CTIA; Janice Obuchowski, former administrator of the National Telecommunications and Information Administration (NTIA); and Vice Chairman Reed Hundt, who served as FCC chairman during the Clinton administration — it was a start-up with no experience in building a wireless network of any kind, much less one that needs to blanket the country and which will need to be 99.9% reliable — or better.
Also, the timing of all of this is working against Frontline, which did not have the deep pockets and easy access to capital of other potential bidders. Even if Frontline were to pull together the money needed to make a competitive bid — no easy task in a tight capital market that will only get tighter should a recession occur — there has to be some concern regarding Frontline’s continued ability to raise the money needed to fund a network that is projected to cost in the neighborhood of $20 billion. And you know how that usually goes — the actual cost likely will far exceed that projection. (If you doubt this, consider the 800 MHz reconfiguration.) So, Frontline’s departure actually might turn out to be a blessing in disguise.
Regarding fears that no other entity will bid, consider that public safety already has had meaningful conversations with likely bidders. Harlin McEwen, chairman of the Public Safety Spectrum Trust (PSST) and Morgan O’Brien, CEO of PSST adviser Cyren Call, are smart, and you can bet they’ve done their homework. I’d be willing to wager that the wish list they established for this network — which was contained in the PSST’s bidder-information guidelines — won’t scare Verizon or AT&T enough to cause them to run away.
Of course, both carriers could well decide to sit out the D Block auction in the hope that no entity bids. In that case, the FCC could decide to alter its requirements for the airwaves to make them more attractive to bidders, lower the reserve price, or both. That actually could turn out to be a good thing for public safety, because should either carrier acquire the spectrum for significantly less money, that’s cash that could — in theory at least — be invested in network infrastructure.
Finally, there is a great deal of intrinsic value associated with being the entity that made possible a communications network that will make the nation’s first responders more effective and keep them safer. Not only could this generate a public-relations boost that money can’t buy, it also would buy political capital in the nation’s capitol that truly would be invaluable.
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