Jeffrey Silva, who keeps RCR News the best news source in the industry, broke the story yesterday that Frontline is ‘closed for business’. Frontline’s withdrawal is likely to raise serious questions about the viability of the emergency network plan. Blog Runner has additional details.
Frontline Wireless planned to bid on the upcoming 700 MHz auction, using an innovative approach that would share spectrum between consumers and public service users. Last fall, Frontline said the FCC was setting the minimum bids too high for the spectrum.
FCC chairman Martin said today he remained hopeful that someone can bid on the public service airwaves, even though the most likely prospect has collapsed. If minimum bids are not received in the other spectrum blocks, the licenses will be re-auctioned. But the public safety block will be treated differently due to the extensive list of conditions required of the bidder.
According to the NY Times, last month, Frontline filed an application to participate in the auction. But it was not able to make the required deposit of $128 million that was due last Thursday, a person involved in the company said. “It was a funding issue,” said the person, who spoke on the condition of anonymity because of F.C.C. rules meant to limit collusion among bidders in the auction.
Frontline was started by Reed Hundt, the former F.C.C. chairman and backed by L. John Doerr, the venture capitalist with Kleiner Perkins Caufield & Byers, James L. Barksdale, the former chief executive of Netscape Communications, and K. Ram Shriram, the former Netscape executive who was also an early backer of Google.
The minimum bid for the spectrum was set at $1.33 billion, although commission rules gave Frontline a 25 percent discount because it was a small business. But in addition to the cost of the spectrum, the winner is also required to cover 75 percent of the population within four years and 99.3 percent within 10 years that some estimate would cost $10 billion.
Verizon could be the beneficiary. They’re a part of the massive IWN project. The $10B Integrated Wireless Network is an ambitious multibillion-dollar, 15-year program — set to build a nationwide interoperable 700MHz network intended primarily for federal law enforcement agencies. Verizon also announced open platform access to 3rd party applications, the preferred approach for the adjoining (shared) public service band.
The 700 Mhz network plan evolved after extensive debate.
APCO, the public service radio lobby, told members of Congress that if they didn’t get the entire 30 Mhz of spectrum in the upper 700 mhz band, people would die.
Cyren Call then pitched the idea of using the entire 30 MHz for shared public/private use. Their idea was to build a nation wide network at no cost to government or taxpayers, then lease out spectrum to both public service users and consumers. But Congress nixed that idea. Cutting out strictly commercial bids would have left too much money on the table. The 700MHz auction, due in late January, 2008, is expected to generate 10-$30 billion for the U.S. treasury.
The FCC, under pressure from Congress, wanted to maximize revenue from the auctions and prefered an approach that limited public service users to four, 6 Mhz chunks, two for narrow-band voice and two (12mhz) for broadband. With the addition of Nextel frequencies and the 4.9 mhz public service band, the FCC argued that public service users had plenty of spectrum to go around. What they didn’t have was money to build out a network.
Within weeks, Reed Hundt pulled together a plan that combined elements of Cyren Call and the FCC’s preferred approach. Frontline would use only a 10 mhz chunk of commercial spectrum and combine it with 12 Mhz of public service spectrum, building a nation-wide network at no cost to taxpayers. The joint public service/commercial plan would allow users to buy radios and service much like they do today with Nextel.
In July, the FCC largely adopted the auction plan advocated by Frontline and approved an open-access plan on 22 MHz of shared spectrum, combining the commercial “D” block with 12 MHz of public service spectrum.
It seemed like a good idea at the time.
Related DailyWireless stories include; FCC Finalizes Rules on 700MHz: Limited Open Access, No Wholesale Requirement, Frontline: Martin Plan Not ‘Open’, Frontline Files 700MHz Plan with FCC, Cyren Call Proposes Joint Commecial/Muni for 700Mhz, 700 MHz Scenarios, AT&T Buys 700MHz from Aloha, Google Android hits G-Spot, Google’s 700 MHz Plans, Cyren Call to Manage Public Safety Spectrum, Android Developer Challenge — $10M, Google: We Got Trouble. . . In 700 Mhz, AT&T, Verizon & Frontline Want 700Mhz Changes, AT&T Buying 700 MHz from Aloha Partners, Oregon’s $500 Million Statewide Wireless Network, General Dynamics Wins IWN Contract, Joint Commecial/Muni Proposed for 700Mhz, Small Ops Squeezed Out of 700MHz?, Verizon Makes its Move for Universal Service Fund, The Smartest Guy in the Room, 700 MHz On The Line?, 700 Mhz Worth $28B, RUS Funding for 700 MHz, The 700 Mhz Club, Channel 54: Where are You?
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