The Federal Communications Commission is delaying announcing the winners of its closely watched 700-MHz wireless spectrum auction in order to address the controversy over the failed sale of one of the largest slices of the spectrum, Portfolio.com has learned.

"Chairman [Kevin] Martin has circulated a brief order to his fellow F.C.C. commissioners that proposes de-linking the D-block, or public-safety spectrum, from the other blocks of spectrum," an F.C.C. spokeswoman said. "This would enable the commission to announce the winners in the other blocks of spectrum, the specific spectrum they won, and the amount they paid for it."

"We cannot put a time frame on when this may occur," she added, "as it is contingent on receiving a majority vote on the proposed order being circulated."

The federal government received bids totaling almost $20 billion for big chunks of wireless spectrum, including a highly coveted national C-block cluster of licenses. The frequencies have been made available as the television industry transitions to digital broadcasting.

But F.C.C. officials are delaying a formal announcement of the winners of the auction—which ended at 3 p.m. yesterday and handily beat Congress's $10 billion estimate—pending a meeting to discuss the controversy surrounding its failed sale of the D-block.

"Because the reserve price [$1.3 billion] for the D-block was not met in the 700-MHz auction, the F.C.C. is now evaluating its options for this spectrum," Martin said in a statement yesterday.

The botched D-block sale—which was for frequencies that the buyer would share with public-safety agencies—marred the otherwise successful auction.

"The $19.59 billion generated by the auction nearly doubled congressional estimates of $10.2 billion," Martin said. "All other 68 auctions conducted by the F.C.C. in the past 15 years collectively generated a total of only $19.1 billion in receipts."

Google said last fall it would bid for the C-block, which had a reserve price of $4.6 billion. In a win for wireless "open access" advocates, the winning bid exceeded that reserve price, triggering two F.C.C. "open access" rules that require the winner—as yet unnamed—to let its customers use any wireless device on its network.

But some have suggested that Google was "bidding to lose" the auction because it had already won the two open-access provisions and because the cost of building an actual network—as much as $25 billion—could prove prohibitive. Other likely bidders include Verizon Wireless and AT&T.

Before it announces the winner of the C-block spectrum, the F.C.C. wants to address to the D-block controversy.

Just weeks before the auction began, former F.C.C. Chairman Reed Hundt's Frontline Wireless's bid for the D- block—which the F.C.C. designated for public-safety agencies as well as commercial wireless service—collapsed for lack of funding. The F.C.C. is currently mulling conducting a new auction of the D-block.

No bidder came close to meeting the $1.3 billion reserve price set for the D-block, although there was one anonymous bid on the spectrum, $472 million.

"We clearly misjudged the interest [in the D-block] and set rules that apparently inhibited the financing [for bidders]," F.C.C. Commissioner Jonathan Adelstein said, according to GigaOm. "It's a concern, and it's something we will revisit with our friends in public safety."

The controversy concerns Cyren Call, the group that represents the Public Safety Spectrum Trust, which holds the national 12-MHz public-safety license that makes up the "public" half of the D-block.

Cyren Call C.E.O. Morgan O'Brien, the former chairman of Nextel, reportedly demanded a $500 million fee over 10 years from Frontline, in exchange for a lease for the public-safety half of the spectrum. He added that Cyren Call wanted to become the "monopoly buyer" of broadband service on the network once it had been built.

Frontline abruptly disintegrated in January before the auction began, citing an inability to raise enough money to bid on the auction.

Gigi Sohn, who runs the Washington, D.C.-based consumer-rights group Public Knowledge, said the F.C.C. needs to explain "the lack of activity in the D-block that would have supported public-safety activity."

"Following reports that Frontline dropped out of the auction as a result of alleged conditions put on the block by the public-safety community, we urge the commission to look into the auction results," Sohn said.