Earlier this year the FCC raised billions by selling spectrum to telecom players. But it failed to auction off a chunk of airwaves that the winning bidder would have to share with emergency responders. Will it find a buyer the second time on the block?
The idea: A wireless network that commercial customers share with public safety organisations, who get priority access. But the “D block” spectrum didn’t sell its first time on the market. Some potential deal-killers:
- Too expensive — the FCC had a $1.33 billion reserve price and a $128 million, nonrefundable down payment.
- Too many restrictions — the buyer would have to build out the network to cover 99.3% of the U.S. population by 2019.
- Too big — the licence covered the whole country, while most wireless spectrum bidding is done on a regional basis.
- Too little control — a nonprofit called the Public Safety Spectrum Trust Corp. would be running the public safety side of things with little transparency.
So the FCC’s new plan, being circulated by FCC Chairman Kevin Martin, is supposed to address those problems.
- Less expensive — a reserve price of $750 million.
- Less restrictive — more flexible buildout requirements.
- More bidding options — including the ability to bid on a per-region basis.
- More transparency — Martin wants PSST meetings to be open to the public.
Will the changes help sell the spectrum? We think so. Restrictions aside, spectrum is still an incredibly rare, valuable resource.
What could throw a wrench in the FCC’s plans? The economy certainly isn’t helping — there are probably fewer companies today than there were a year ago with hundreds of millions of dollars to spend on airwaves. And as RCR notes, if the new rules aren’t set by the time a new administration takes over by next January, there could be more delays. Either way, don’t expect a new auction until next spring at the earliest.