Intro: In this podcast we continue discussion on the in-progress FCC 700 MHz spectrum auction, with a focus on the D-Block public safety piece.

Mike: Gordon, can you give us a little background on the auction?

Back in 2005 Congress passed a law that requires all U.S. TV stations to convert to all digital broadcasts and give up analog spectrum in the 700 MHz frequency band. This law will free up 62 MHz of spectrum in the 700 MHz band and effectively eliminate channels between 52 and 69. This conversion, which has a deadline of February 18, 2009, has freed up spectrum that is being split up by the FCC into five blocks:

• A-Block - 12 MHz, split up into 176 smaller economic areas
• B-Block - 12 MHz, split up into 734 cellular market areas
• C-Block - 22 MHz, up into 12 regional licenses
• D-Block - 10MHz, combined with approximately 10MHz allocated for public safety, a single national license.
• E-Block - 6 MHz, split up into 176 smaller economic areas

Each Block has a reserve price set by FCC and if a reserve price is not met in the auction, the FCC will end up re-auctioning that piece of spectrum.

Mike: I know we discussed the auction a few weeks ago and not much has changed. Can you give us an update on where the auction is today?

Bidding round 102 came to a close yesterday afternoon with $19,524,595,900 (last week the auction finished at $19,450,389,100 - it is slowing) in total provisionally winning bids. Things have slowed considerably with only 40 new bids placed in round 102. For reference, on Thursday, each round averaged about 50 new bids.Most active in the final round yesterday were E-Block licenses in the Bismark, North Dakota and Rapid City, South Dakota areas along with B-Block licenses in the southeastern United States.The public safety D-Block still has not had a bid since the first round and will end up being re-auctioned by the FCC.This may end up being the last week (an FCC decision but I'm thinking so). After the auction is closed the FCC will announce the winners.

Mike: Let's talk specifically about D-Block, the public safety piece. What's happened - why are we not seeing any new bids?

I think you have to go back and look at the history of D-Block. Early on it appeared Frontline Wireless would be one of the biggest bidders for D-Block spectrum - the company was setup for D-Block and had worked closely with the FCC on putting together specifications for the spectrum. Frontline built a formidable team including Vice Chairman Reed Hundt, who served as Chairman of the FCC between 1993 and 1997. The business plan, the organization, the technology seemed to all be in place........ On January 12 the company placed the following statement on their website:

Frontline Wireless is closed for business at this time. We have no further comment.

Another company, Cyren Call also looked like they were planning to bid on the D-Block Auction but did not.

Mike: So what happened?

Rumor has it Frontline could not attract enough funders - it seemed like a good investment - or at least you may think so up front. Many are now asking if the FCC's approach to solving the public safety inter-operability problem is in trouble. At the same time many are also asking "Is there a better way?"

I've always liked the idea of public-private partnerships and we've seen them work in times of disaster - last August I wrote