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Consumer watchdogs push for FCC auction investigation

The "d" block of the 700MHz spectrum auction reserved for public safety didn't hit its reserve price, and consumer advocates want to know why.

Consumer watchdog groups and some lawmakers want to know why the block of spectrum reserved for public safety in the Federal Communications Commission's 700 MHz auction didn't hit its reserve price.

On Wednesday, a coalition of nine consumer advocacy groups, including the Consumer Federation of America, Consumers Union and the Media Access Project, sent a letter to the chairman of the FCC asking the agency to investigate whether the public safety requirements for "d" block license were too stringent. The groups also want the FCC to study whether plans for the shared public-private network are even still viable.

But consumer groups aren't the only ones concerned that the d block didn't sell. House Energy and Commerce Committee Chairman John D. Dingell (D-Mich.) and telecommunications subcommittee chairman Edward J. Markey (D-Mass.) are already planning a hearing for early next month to consider whether the public-private partnership model for building the wireless network for emergency responders should be changed or if the reserve price should be lowered.

FCC Chairman Kevin Martin has asked the agency's inspector general to look into complaints about the d-block auction, a Reuters story said.

The 700 MHz spectrum auction racked up a record $19.59 billion, but no one in the auction was willing to pony up the government's minimum price of $1.3 billion for the d block spectrum. The lone bid recorded for the d block was $472 million.

Under the rules set by the FCC before the auction started in January, the winner of the d-block licenses would be required to partner with local police, fire departments, and other public safety groups to provide a nationwide interoperable public safety network. This type of network is sorely missing in the U.S. And such a network was recommended to be built by the 9/11 Commission that investigated the events surrounding the terrorist attacks in New York City and Washington, D.C. in 2001.

A company called Cyren Call had been selected to act as the intermediary between public safety agencies and whichever private sector company won the spectrum licenses.

But even before the spectrum auction began, the only major contender in the auction, a company called Frontline Wireless, went out of business. The company had apparently been unable to secure funding.

Now, consumer groups and lawmakers are asking whether the reserve price was too high or if the strict public safety requirements were too difficult for a company in the private sector to meet.

In the meantime, the FCC has officially "de-linked" the d-block spectrum from the other blocks offered in the auction, so that it can be auctioned off later. The FCC said in a press release on Wednesday that it will not re-offer the d block spectrum immediately in the subsequent Auction 76. Instead, it will consider its options for how to license this spectrum in the future.

That said FCC Chairman Martin and the other commissioners said they were committed to making spectrum available for a nationwide interoperable public safety network before the February 2009 Digital TV transition.

"It is a travesty that our nation has failed, so far, to meet this urgent public safety challenge," Commissioner Michael Copps, said in a statement. "Now we have another chance to build the network that public safety and the American public need. I remain committed to working with my colleagues to succeed in this most important task."