700 MHz auction concludes with just one D Block bid

Bidding in the FCC’s 700 MHz auction concluded today after 260 rounds, with high bids for 1091 licenses totaling $19.592 billion but only one below-reserve price bid for the D Block tied to a shared-network proposal for a nationwide wireless broadband network for public safety.

In the auction, the FCC generated much more than the $12 billion Congress had budgeted for the auction, so the process was a financial success for the U.S. Treasury—a significant feat, given the tight capital markets and concerns about the FCC’s reserve prices for the various blocks when the auction began.

However, the auction likely failed in one notable area: establishing a clear winner of the nationwide 10 MHz D Block that was expected to reach a network-sharing agreement with the Public Safety Spectrum Trust (PSST)—holder of an adjacent, nationwide 10 MHz broadband license for public safety. FCC rules call for the D Block winner to use the combined 20 MHz of nationwide spectrum to build a nationwide broadband network for public-safety and commercial customers.

But the D Block attracted only a single first-round bid of $472 million—a figure that is only a fraction of the FCC’s $1.3 billion reserve price for the spectrum. Theoretically, the FCC could accept the bid, but most industry analysts believe the commission will reauction the airwaves with new rules.

Proponents of the public-private concept have acknowledged that some rule changes are needed, such as the elimination of the reserve price and a reduction in the possible financial penalties the D Block winner might face if it cannot reach a network-sharing agreement with public safety.

PSST Chairman Harlin McEwen said the FCC should not abandon the public-private network concept.

“If changes are necessary, the FCC must make certain that the interests of public safety remain at the top of the list,” McEwen said in a prepared statement. “Only a public-private partnership will provide an innovative solution that will permanently solve our country’s continuing public-safety communications crisis, and first responders have a vital role to play in any network designed for their benefit.”

“I cannot understand opposition to the only viable solution to date that would transform public safety communications in our country and allow public safety to benefit from the next generation of wireless technology in a meaningful way. However, I am hopeful that decision-makers in Washington will see that these unconstructive comments are harmful to those who are trusted to protect the public every day.”