Public Safety and Profit: On the Same Wavelength?
Morgan O'Brien got rich the old-fashioned way, cobbling together small companies to make a big one that you've come to know as Nextel Communications.
Now O'Brien wants to get rich the Washington way -- using lobbyists. He's hired a bunch of big guns to get control of more than $5 billion worth of broadband spectrum. He wants it for a noble cause: to help first responders communicate during emergencies. But O'Brien also hopes to manage the valuable space, and that work just might make him his second fortune.
Several lawmakers, economists and interest groups are outraged. They wonder why the government should, essentially, hand over such a prime asset. "It's a get-rich-quick scheme to the tune of billions of dollars," said Jeffrey A. Eisenach, a former policy aide at the Federal Trade Commission and the White House budget office.
O'Brien defends his idea as a prudent investment for Americans who have too often seen medical and police services fall apart when serious crises strike. "I can't imagine a better or more satisfying business," he said.
O'Brien's company, Cyren Call Communications, wants Congress to set aside 30 megahertz of radio spectrum (that's a lot) now scheduled to be auctioned off early next year. Cyren Call's consultants include Wexler & Walker Public Policy Associates, the Fritts Group (run by Eddie Fritts, the ex-president of the National Association of Broadcasters), and soon (O'Brien hopes) Tom Ridge, the former secretary of Homeland Security.
Cyren Call wants the government to place the spectrum into a trust, which would, with private funding, build a nationwide wireless network for emergency workers intended to prevent the kind of communications breakdowns that happened after Hurricane Katrina and the Sept. 11, 2001, attacks. When first responders are not using the system, commercial customers could.
By managing the venture, Cyren Call hopes to make its money. Thanks to the company's prodding, the proposal has been endorsed by the International Association of Chiefs of Police and the Association of Public-Safety Communications Officials-International, among other first-responder groups.
"It's a Robin Hood plan," Fritts said. "It takes from the rich and gives to the poor -- first responders."
But others see it as a money grab using first responders as a front, and they are fighting to stop it. "O'Brien's proposal is based on a lot of promises that we believe he can't keep," said Christopher Guttman-McCabe of CTIA-the Wireless Association. Also opposed are Rep. Fred Upton (R-Mich.), former chairman of the House's telecommunications subcommittee, and the Consumer Electronics Association.
Opponents note that public safety agencies are already guaranteed by law to receive 24 megahertz of spectrum and have not found a way to use it all. They also question O'Brien's financing and doubt that he can attract enough money to construct the system.
At first, O'Brien wanted the spectrum to be placed into trust without any fees to the U.S. Treasury. But after an outcry, he now proposes to pay $5 billion, an amount he would raise with the aid of federal loan guarantees -- a distinction without a difference to Cyren Call's many critics.
O'Brien said he chose the company's name because it is a high-tech version of "siren," which means both a mythological nymph whose beautiful songs lured ancient ships into the rocks and a loud blast that warns people to get out of the way.