Channel Surfing Blog 

Kelly Teal

We now know why Frontline Wireless suddenly closed shop and why the D Block didn’t sell in the FCC’s 700MHz spectrum auction. Turns out, the Public Safety Spectrum Trust (PSST) – the non-profit that holds the D Block licenses but that can’t make any money until there’s a commercial provider operating the bandwidth – attached some pretty incredible conditions to the spectrum.

For starters, the PSST was talking about “negotiable” annual lease payments of $50 million-$55 million. For 10 years. And with no guarantees that public safety or commercial users would ever sign up if Frontline Wireless won the auction, it’s no wonder investors jumped ship.

There were other requirements, too, that made the D Block less and less attractive to equity firms.

The obvious question now is what is the FCC going to do about it? There’s talk of a re-auction of the D Block and something will have to be different the next time around.

But there are better questions the FCC, Congress and the industry should ask themselves. How did this debacle come about? How can it be prevented from recurring? Why are so few companies interested in the D Block? It’s curious to me that a non-profit selected by the FCC also happens to have as its advisor the for-profit company that hoped to serve as the D Block’s MVNO. Frontline Wireless would have been the underlying carrier while Cyren Call – founded by Nextel’s Morgan O’Brien – intended to serve as the reseller whose end users would have been the public safety community.

I know the Inspector General cleared Cyren Call and the PSST of any collusion. But I still am left to wonder why so few entities hold so much power over a critical piece of government – read, the peoples’ – property.