Dingell worried by D block spectrum sale
WASHINGTON (Reuters) - A key House of Representatives lawmaker voiced concern on Thursday about the scant bidding for an important piece of the airwaves being auctioned by the U.S. government.
House Energy and Commerce Committee Chairman John Dingell said the Federal Communications Commission was "having real problems" finding a bidder to meet the minimum price for the "D" block of 700 megahertz wireless spectrum, which is to be shared with public safety agencies.
"They seem to be having real problems in terms of getting people who say they can meet the requirements with regard to police, fire and public safety while at the same time paying the proper price," Dingell, a Michigan Democrat, said in an interview for the Reuters Regulation Summit.
Under rules set by the FCC, the winning bidder for the D block spectrum would have to meet a $1.3 billion minimum price, and then negotiate an agreement with police, firefighters and other public safety groups that would give them priority use during an emergency.
Bids have surpassed the minimum levels for other blocks in the 700 megahertz auction, pushing the proceeds so far to a record-setting $19.1 billion. Under FCC rules, winning bidders will not be identified until the auction is over.
But there have been no offers for the D block portion of the airwaves since the beginning of the auction on January 24, when one bid came in for $472 million.
"All of a sudden they're finding that maybe they were a bit more optimistic than was justified by good judgment," Dingell told Reuters.
A key potential bidder for the D block airwaves, Frontline Wireless, dropped out earlier this month. Frontline declined to say why, but analysts blame it on a shortage of financing.
Other potential bidders in the auction range from entrenched carriers AT&T Inc (T.N) and Verizon Wireless, to possible new competitors like Internet company Google Inc (GOOG.O), EchoStar Communications Corp (DISH.O) and Cablevision Systems Corp (CVC.N).
Verizon Wireless is a joint venture of Verizon Communications Inc (VZ.N) and Vodafone Group Plc (VOD.L).
If no other bidders reach the $1.3 billion minimum, the FCC could re-auction the D block spectrum and possibly modify the network-sharing requirement or lower the minimum bid.
Dingell said it was too soon to say what the FCC should do if the D block spectrum does not sell. But he questioned whether the agency had done a good job in setting up the sale of the D block.
"I'm not going to say that it indicates mismanagement. I'm going to ask you though: Does it indicate good management? And I have to say if that question is asked of me: It doesn't."
(For summit blog: summitnotebook.reuters.com/)
(Reporting by Peter Kaplan; Editing by Tim Dobbyn)
