700 MHz Update: FCC Severs D Block, Refers Cyren Call Allegations To Inspector General.

The FCC can certainly move fast when it wants to — and when it has had a few weeks to get used to the idea. The FCC just released a public notice that it will “de-link” the D Block from Auction 73, and will release the names of the winners as soon as the Commission collects the payments (ten days after it issues the official notice that the auction is over and that parties now need to file “long forms” and pay up).

Also of importance, Chairman Martin has referred the question of whether Cyren Call made all manner of demands of Frontline, and did this break any rules to the Office of the Inspector General. This extremely important detail was buried in this somewhat less than stellar Washington Post article about our letter to the FCC calling for an investigation. I say “less than stellar” because, in addition to “burying the lead” big time, the reporters did not trouble themselves to contact me despite that fact that (a) I broke this story in the first place (only narrowly beating out Dow Jones’ Cory Boles); (b) I drafted the friggin’ letter. I therefore recommend this far superior article in eWeek (i.e., it mentions me and links to the relevant blog entry — a clear mark of superior journalistic skills).

A bit more analysis below . . .

Only a few minor additional tea leaves here. The official order is extremely terse, and was obviously in the can and ready to vote as soon as the auction ended. Translating from the legalese, it says: because every other block met its reserve, but D Block didn’t, we really do not need to have an immediate reauction, so we won’t. Instead, we will go back and figure out what to do. In the FCC’s Public Notice, they added the additional detail that winners will be released after the deadline to pay up (ten days after the Wireless Bureau issues its official “auction over” notice). Commissioners Copps and Adelstein issued separate statements underscoring the urgency of the need to establish a national interoperable public safety network.

So we will need to see if anyone bites on our suggestion to really rethink this whole thing rather than just tweak at the edges. While I’m still up for a public/private partnership if Congress won’t cough up the bucks (although God knows that would be the best solution), I’m hopeful that the FCC will consider more than just dropping the reserve price and possibly giving Morgan O’Brien a slap on the wrist. (I’ve got a few preliminary suggestions here) As I have said before, the first step is an open process to find out what happened and why this didn’t work.

Which brings us back to Cyren Call. Recall there are two issues here, assuming the alleged conversation took place: (a) Did Morgan O’Brien violate any rules? and (b) Did this conversation kill Frontline and scare off other potential bidders? An investigation by the Inspector General will only answer the first question. It will require a public and transparent process to resolve whether the current rules, which allow Cyren Call to make such demands, effectively prevent anyone from bidding on the D Block.

Stay tuned . . . .

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