It's Nice When the FCC Listens Part II — The Cyren Call Investigation Is Out.

When it rains, it positively pours. The FCC just released its Inspector General Report on whether Cyren Call screwed up the D Block. As readers may recall, I and my friends from the Public Interest Spectrum Coalition (PISC) sent a letter to the FCC as soon as the auction ended, asking the FCC to investigate the allegations over whether Cyren Call scared away D Block bidders. To his credit, Martin referred our letter to the FCC’s inspector general. The IG did a quick and thorough job, which you can read here. I shall add that it always gives one pause to find oneself as a subject heading in an IG report.

Generally, I’m satisfied with the report, which confirms my own suppositions after the anticollusion rules lifted and Cyren Call started yapping. Critically:

1) The meetings took place;

2) They were understood by all participants to be business negotiations, not “take it or leave it” demands;

3) The lease payment itself was not a deal breaker, but the potential bidders interviewed said that so many questions about potential financial liability and business model remained — aggravated in part by the uncertain role of Cyren Call — that they opted to stay away (or, as the IG concludes “this was just one drop in many different buckets”);

4) No FCC rules were broken and no one acted in bad faith, therefore there is no need for a referral for any criminal investigation.

Personal reflections below . . . .

Since it is very close to sundown before Sabbath, I need to make this quick. So my top takeaways are:

1) I’m very glad we had an IG investigation. Bluntly, this was the only way to clear the air and get the facts down. I think Cyren Call and PSST have done themselves no favors by making a big deal over the word “demand,” and have been so defensive that people assume they had something to hide. But the fact is, we do investigations to resolve doubt. If we had relied on voluntary statements in a rulemaking, we would have had all sorts of unproductive hair splitting and accusations. This way, and team of federal investigators went out and got everyone to tell them the straight story. And, given that everybody tells pretty consistent stories, I believe the report was thorough and not some kind of cover up.

2) This also helps point the way for the FCC going forward. It is understandable that the first time the FCC tried to leave it to the parties to negotiate. But that did not work. The FCC is going to have to set clear limits for all parties on what they can demand, what their potential financial liabilities will be, and how this business will work. That includes what kind of business model PSST can have and what sort of fees are reasonable and unreasonable. At the same time, the FCC will also have to set some minimum standards for the public safety network. We cannot flip from having the private bidders feel they are at the mercy of PSST (and therefore Cyren Call) to having PSST at the mercy of the D Block winner. That’s damn hard. But that’s why they get nominated by the President and confirmed by the Senate.

Stay tuned . . . .