Private Funds Sought for Safety Network

Federal Communications Commission (FCC) commissioner Michael Copps speaks during the annual FCC Breakfast at the National Association of Broadcasters conference in Las Vegas in this April 17, 2007 file photo. The communications system used by the nation's police, fire and other public safety agencies remains plagued by problems despite the lessons of 9/11 and Hurricane Katrina. (AP Photo/Jae C. Hong, File) (Jae C. Hong - AP)

The minimum bid on the spectrum block is $1.33 billion, according to the rules guiding the auction, which were released Friday. The rules are vague about what happens if the reserve price isn't met.

While the FCC adopted the major elements of Frontline's plan, it did not agree on one key issue. Frontline wanted the winner of the commercial license to be required to offer "wholesale" access to the network, leasing network space to potential competitors. Such a requirement would have discouraged the dominant wireless carriers from bidding.

Frontline CEO Haynes Griffin said the company will ask the FCC to reconsider its decision. The company contends the existing auction rules present obstacles to newcomers who want to participate.

Despite the disappointing decision on wholesaling, the company will still bid, although it may ask others to pitch in.

"Frontline will bid in the auction," Griffin said. "But we think a consortium is likely to be the preferred path to success."

The company certainly has plenty of deep-pocketed friends who might help out. Among them are former Netscape CEO James Barksdale, venture capitalist John Doerr and Ram Shriram, a founding board member of Google Inc.

Google is a major proponent of the wholesale concept.

Frontline's management includes former FCC Chairman Reed Hundt, who is the company's vice chairman, and Janice Obuchowski, a former assistant secretary of commerce in charge of telecommunications policy, who is chairwoman.

Regardless of who submits the winning bid, construction of the network will be a major undertaking. According to the auction rules, it must cover 75 percent of the population within four years and 99.3 percent within 10 years.

Unlike a regular wireless network, it must be "hardened," meaning it must be able to withstand rough weather conditions. It will require thousands of new cell towers plus a satellite backup system in case the primary network goes down.

Frontline estimates the cost at around $10 billion, not including the cost of the spectrum.

To date, the public safety network proposal has been framed from the perspective of Wall Street, Silicon Valley and the federal government.