D Block provides $3.4 billion more in revenue if assigned to public safety rather than auctioned, report claims

The Phoenix Center, a think tank generally aligned with the views of the nation’s largest wireless companies, released a preliminary report today that claims assigning the 10 MHz of contiguous 700 MHz D Block spectrum to public safety could provide at least $3.4 billion more in social benefits compared to an auction of spectrum for commercial use as favored by Julius Genachowski, FCC chairman.

The report argues that the Obama Administration’s promise of freeing up an additional 500 MHz of spectrum for commercial use over the next five years would result in only a small impact of a temporary, incremental increase of 10 MHz of spectrum on market outcomes and the loss of auction revenues today is more than offset by higher auction revenues and lower public safety network deployment costs tomorrow. It also estimates that if policymakers chose not to give public safety the D Block and instead opt to require future allocations of 700 MHz spectrum to support the encroachment of public-safety users during episodes of resource scarcity, then such encumbrances could materially diminish the auction value of such spectrum by as much as 86%.

“As we approach the 10-year anniversary of September 11, the fact that we do not yet have a modern, interoperable nationwide public safety network is disappointing,” Lawrence Spiwak, Phoenix Center president and study co-author, said in a prepared statement. “As the D Block represents a very unique opportunity to provide the public safety community with a contiguous block of high-quality spectrum — and, in so doing, substantially reducing the costs of deploying a robust network — giving the D Block to public safety is economically rational.”

Factors Reducing Auction Value of the D Block

1. Public Safety Obligations
2. Other Obligations, such as Open Internet/Platform Obligations
3. Excluded Bidders
4. Economic Crisis

Source: Phoenix Center

For more information on broadband, including a discussion of the National Broadband Plan, attend these sessions at IWCE in Las Vegas, March 7-11, 2011.