media logos

FCC tweaks auction rules

It’s not a huge change in the rules to many, but to Frontline it means the world. The FCC has ruled that the winner of the 10 megahertz block of spectrum that is reserved for public safety can use all excess bandwidth on a wholesale basis, rather than a retail basis. Gibberish? It might be to many people outside the industry.

If the excess bandwidth was required to be used on a retail basis, that means the winner would have to compete with the big boys. Now, though, provisions allow for Frontline, if they win the block, to operate on a wholesale basis.

“This issue for us of needing to be a retailer made us unappetizing for a retailer wanting to invest in us,” said Hundt, Frontline’s vice chairman, in an interview. “Our pure wholesale model has been endorsed.”

So Frontline should have an easier time attracting investors. Without further backing, the company, in all likelihood, cannot meet the government’s reserve price of $1.3 billion for that block. If the price is not met by anyone, the sale is considered voided.

The main purpose of this 10 megahertz block in question is for the benefit of law enforcement and other first responders. Once that network is built out, the excess can be used at will by the winning bidder.

Is Frontline the front runner in this? We haven’t really heard about another company being interested in this block. It appears that they’re going hardest after it, at least.

Deadline for auction registration is December 3.

[CNN Money]