F.C.C. Chairman Kevin Martin Wants to Cut D Block Price

Sam Gustin writes: The Federal Communications Commission's 700 Mhz wireless spectrum auction earlier this year was widely considered a success, with one exception.

The D block of airwaves, which was allocated for a joint public-private network to used by public safety officials in case of emergency, failed to meet its $1.3 billion reserve price, leaving the spectrum on the table.

Tomorrow, F.C.C. chairman Kevin Martin will ask the commission to vote on his proposal reducing the minimum bid to $750 million in an effort to attract private investment, according to Reuters.

The failure of the D block to sell marred an otherwise successful spectrum auction, which raised $20 billion for the federal government. Verizon Wireless was the big winner, snapping up most of the highly coveted C block of spectrum licenses.

Just weeks before the auction began, former F.C.C. chairman Reed Hundt's Frontline Wireless's bid for the D block fell apart, after he was unable to raise enough capital to make a successful bid.

Some analysts have questioned whether a public/private partnership for the D block makes economic sense.

"There is some sense (among industry) that this public, private, commercial partnership may be too difficult to work as a matter of economics," Stanford Group analyst Paul Glenchur told the news wire.

What's more, in today's rapidly deteriorating economic climate, it remains to be seen whether companies will be willing to meet the reserve price for the D block, despite the fact that it may be cut in half.