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FCC Asked to Probe Auction

Kevin J. Martin is chairman of the FCC.
Kevin J. Martin is chairman of the FCC. (Dennis Brack - Bloomberg News)
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Specifically, the groups questioned a meeting between Cyren Call and Frontline Wireless, the leading prospective bidder to be the trust's partner in developing a public safety network.

Sources familiar with discussions said Cyren Call founder and former Nextel chairman Morgan O'Brien demanded a lease payment for using the spectrum of up to $500 million over 10 years from a winning bidder -- adding to Frontline's cost of building the public safety network. In a Nov. 30 filing to the FCC, the trust said such payments would go to operating expenses and were a normal practice for a wireless carrier.

Public-safety officials said O'Brien's firm was a natural partner because of his involvement in Nextel and that company's history of providing communications for dispatch systems. But critics suggested that Cyren Call was hoping to tap a lucrative market by selling devices and software applications to public safety agencies.

Frontline, whose executives included former FCC chairman Reed E. Hundt and Janice I. Obuchowski, former head of the National Telecommunications and Information Administration, shut down a week before the FCC auction opened Jan. 24, after investors backed out.

"Obviously people didn't show up and bid for a reason," a congressional aide tracking the process said on condition of anonymity because of the sensitivity of the allegations. "I think what we will find out is . . . they thought they would have to engage in never-ending negotiations and requests for cash."

Harlin R. McEwen, chairman of the Public Safety Spectrum Trust, said he could not discuss the allegations because of FCC rules. He issued a statement rejecting calls to redirect public safety spectrum for other uses, or to limit the network for regional use.

"If changes are necessary, the FCC must make certain that the interests of public safety remain at the top of the list," the statement said. "Only a public-private partnership will provide an innovative solution that will permanently solve our country's continuing public safety communications crisis, and first responders have a vital role to play in any network designed for their benefit."

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