Order Code RL34054
Public-Private Partnership for a
Public Safety Network: Governance and Policy
Updated May 22, 2008
Linda K. Moore
Analyst in Telecommunications Policy
Resources, Science, and Industry Division

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Public-Private Partnership for a Public Safety Network:
Governance and Policy
Summary
This report summarizes salient points of Federal Communications Commission
(FCC) actions regarding the creation of a public-private partnership to build and
manage a national communications network for public safety use. The
Communications Act of 1934, as amended, empowers the FCC to set rules for
auctions and to take steps to ensure the safety of the public. The FCC has used this
authority to create a governance structure that would allow a Public Safety
Broadband Licensee (PSBL) to share spectrum rights with a commercial enterprise
and to collaborate in the construction and management of a shared network. As
currently mandated by the FCC, a public-private partnership would build a shared
network on spectrum capacity assigned to two separate license-holders. As proposed
by the FCC plan, the PSBL would hold a national license of 10MHz in the 700 MHz
band and a commercial partner would hold an adjacent license for 10 MHz,
nationwide, designated as the D Block. The two licensees and the network would
operate according to requirements set out by the FCC as part of its rulemaking for the
auction of frequencies within the 700 MHz band, known as Auction 73. These
frequencies are being vacated by television broadcasters in their switch to digital
technologies.
The 700 MHz auction, Auction 73, ended on March 18, 2008. The auction
grossed $19,592,420,000. There was only one bid for the D Block, well below the
reserve price set for that license. The FCC therefore did not assign the license but
has proceeded to review its rules regarding licensing, structuring a partnership,
setting service requirements, and other rules and obligations established prior to the
commencement of Auction 73. It has prepared a further notice of proposed rule-
making that seeks comments on identified options that might be pursued in disposing
of the D Block. Comments are due by June 20, 2008.
Some of the proposals from the FCC or frequently mentioned by industry
experts are reviewed in this report. Some of the possible solutions can be achieved
exclusively through the rule-making process but several that address how best to
salvage plans for a nationwide, broadband network for public safety would require
the assistance of Congress through legislation. A bill that would provide financial
assistance to the Public Safety Broadband Licencee through grants made by the FCC
has been introduced. The Public Safety Broadband Authorization Act of 2008 (H.R.
6055, Harman) would establish conditions for the operations of the PSBL and would
provide $1 million in both FY2009 and FY2010 for expenses. An additional $2
million would be authorized for used by the FCC “to promote the establishment of
a nationwide, interoperable broadband public safety communications network.”

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Contents
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Public-Private Partnership: The Auction . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Public-Private Partnership: Key Assumptions . . . . . . . . . . . . . . . . . . . . . . . . 2
Public-Private Partnership: The Debate and Options . . . . . . . . . . . . . . . . . . 3
Modify the Auction Rules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Eliminate the Network Sharing Agreement . . . . . . . . . . . . . . . . . . . . . . 5
Use Federal Funds to Build a Public Safety Network . . . . . . . . . . . . . . 5
Choose a Different Organizational Structure . . . . . . . . . . . . . . . . . . . . . 5
The Public-Private Partnership: FCC Efforts . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Regulatory Governance Through Service Rules . . . . . . . . . . . . . . . . . . . . . . 8
Public Safety Broadband License . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Requirements for the Public Safety Broadband Licensee . . . . . . . . . . . . . . 10
Selection and Establishment of the Public Safety Broadband Licensee . . . 10
Board of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Oversight . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Right to Revoke License . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Duration of License . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Obligations of the Public Safety Licensee . . . . . . . . . . . . . . . . . . . . . . . . . . 12
The Commercial Partner . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
D Block License . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Minimum Bids . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Assignment of License: Network Sharing Agreement . . . . . . . . . . . . . 13
Timetable for Negotiations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Assignment of License: Corporate Structure . . . . . . . . . . . . . . . . . . . . 14
Cancellation of License . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Duration of License . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Network Build Out and Performance Levels . . . . . . . . . . . . . . . . . . . . . . . . 15
Build Out Benchmarks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Performance Guarantees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Network Sharing Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
FCC Network Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Other Obligations and Stipulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Duration of Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Modification of the Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Rules for Managing Spectrum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Rebanding Public Safety Spectrum at 700 MHz . . . . . . . . . . . . . . . . . . . . . . . . . 19
Relocating Public Safety Networks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Costs Associated With the Relocation . . . . . . . . . . . . . . . . . . . . . . . . . 20
Freeze on New Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Determining Reimbursement of Costs . . . . . . . . . . . . . . . . . . . . . . . . . 21

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Paying Reimbursements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Wideband Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Congressional Oversight . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Governance through Regulation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

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Public-Private Partnership
for a Public Safety Network:
Governance and Policy
Introduction
This discussion of governance for a public-private partnership is based on
preparations undertaken by the Federal Communications Commission (FCC) to
auction 62 MHz1 of radio frequencies in the 700 MHz band of radio spectrum in
conformance with requirements in the Deficit Reduction Act.2 The FCC issued rules,
in a Second Report and Order,3 concerning the allocation of this spectrum, the
auction, the final disposition of spectrum assigned for public safety use, and the
creation of a public-private partnership to build and operate a nationwide network for
public safety users, with agreements for sharing spectrum.
The decision to create a partnership was centered on two conclusions, endorsed
by the FCC and the majority of stakeholders: 1) that a network with national
coverage would meet public safety needs for robust communications capabilities,
information, and interoperability; and 2) that sharing spectrum and network facilities
with commercial users would benefit public safety by providing new sources of
funding,4 economies of scale in building the needed network, and access to additional
spectrum in times of large-scale emergencies, among other benefits.
1 Spectrum allocations are assigned within bands that are divided into bandwidths or
channels based on assigned frequencies. Electromagnetic radio waves are usually identified
by frequency, measured in cycles per second, or hertz. Standard abbreviations for
measuring frequencies include kHz — kilohertz or thousands of hertz; MHz — megahertz,
or millions of hertz; and GHz — gigahertz, or billions of hertz. The 700 MHz band plan
(698 MHz to 806 MHz) refers to those channels that are assigned to technologies that
transmit signals at speeds within or near 700 million cycles per second.
2 P.L. 109-171, Sec. 3003 (a) (2).
3 FCC, Second Report and Order, July 31, 2007, WT Docket No. 96-86. The full notice was
released August 10, 2007; the Public Notice for comment on proposed auction rules was
released August 17, 2007 (AU Docket # 07-157).
4 Cyren Call Communications Corporation, in ex parte comments filed with the FCC on June
4, 2007, set the cumulative capital expenditure for building a public-private network at $18
billion, of which roughly a third of the cost would be for enhancements for public safety use.
An estimate from Northrop-Grumman Corporation places the cost at $30 billion, when
service applications are included. (Statement by Mark S. Adams, Chief Architect Networks
and Communications at WCA 2007, Washington, DC, June 14, 2007.) These estimates do
not include the cost of radios.

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CRS-2
Public-Private Partnership: The Auction
As structured by the FCC, two adjacent spectrum license-holders would
collaborate so that their combined spectrum capacity would be adequate to support
a broadband network. In anticipation of obtaining a commercial partner, the FCC
assigned a national license for 10 MHz to a not-for-profit corporation formed to
represent public safety interests. The corresponding license, also for 10 MHz
nationwide, was to be sold to a commercial enterprise as part of the auction of
licenses at 700 MHz, Auction 73. The commercial license, known as the D Block,
attracted only one bidder at the auction, which concluded March 18, 2008.
Qualcomm, Inc. placed an opening bid of $472 million but there were no other
bidders; consequently, the reserve price of $1.3 billion set by the FCC was not met.
In an Order adopted and released on March 20, 2008, the FCC directed the Wireless
Telecommunications Bureau not to proceed with the re-auction of the D Block
because it is “in the public interest to provide additional time to consider all options
...”5
The FCC therefore has begun a review of its rules regarding licensing,
structuring a partnership, setting service requirements, and other rules and obligations
established prior to the commencement of Auction 73. It has prepared a further
notice of proposed rule-making that seeks comments on identified options that might
be pursued in disposing of the D Block.6 Comments are due by June 20, 2008.7

Public-Private Partnership: Key Assumptions
It was noted above that there is general agreement that sharing spectrum and
network facilities with commercial users would benefit public safety by providing
new sources of funding, economies of scale in building the needed network, and
access to additional spectrum in times of large-scale emergencies. These benefits are
generally accepted as concrete and desirable and, although there is much discussion
about how to achieve the goal of sharing resources between the public and private
sectors, the consensus remains that this is the goal. For the purpose of analysis, this
report further assumes three needs that must be met for an effective solution. These
are
! Sufficient spectrum for a broadband network. The amount of
spectrum needed to operate a nationwide broadband network, with
the coverage required by public safety, is at least 20 MHz, according
to most experts.

5 FCC, Order, AU Docket No. 07-157, March 20, 2008 at [http://hraunfoss.fcc.gov/
edocs_public/attachmatch/FCC-08-91A1.pdf].
6 FCC, Second Further Notice of Proposed Rulemaking, Released May 14, 2008, PS Docket
No. 06-229 at [http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-08-128A1.pdf].
7 The proposed rulemaking stipulates that the comment period is to end 30 days from
publication of notice in the Federal Register, which occurred May 21, 2008.

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CRS-3
! Source of funds. A source of funds needs to be identified to meet
unavoidable costs to public safety associated with the creation of a
single, national public safety license. These costs include the costs
of rebanding as part of the new allocation plan for 700 MHz set forth
by the FCC, and the costs of spectrum license administration and
frequency coordination — tasks usually managed through state or
local agencies.
! Management structure. The key elements for a public-private
partnership as set forth by the FCC are: 1) a Public Safety
Broadband Licensee; 2) a public-private partnership; and 3) a
Network Sharing Agreement, required in order to build and manage
a network shared by commercial users and emergency personnel.
There is also a frequently mentioned assumption that is not associated with a
particular solution.
! Commercial partner(s) will use the shared network for consumer
services and therefore incentives are required to build out a network
that meets the higher standards required for public safety.
This assumption ignores the projections for significant demand from the
business sector for mobile access to data and the requirements of many businesses
for security and reliability equal to or greater than those of public safety.
Public-Private Partnership: The Debate and Options
Since the conclusion of the auction, there has been a vigorous public debate
about why the D Block license was not successfully auctioned and what steps might
be taken going forward to assign the license.8 Some of the reasons why the D Block
failed to attract a winning bid have been circulated through the media and presented
at Congressional hearings.9 Discussion of possible flaws in the structure of the
auction, and how some rules may have discouraged potential bidders, is only part of
the debate. The debate also encompasses other solutions to meet the goal of proving
an interoperable public safety broadband network. Principle points under
consideration can be categorized as
! Modify the auction rules to eliminate FCC requirements that might
have discouraged potential bidders and keep the structure of the
8 The FCC’s Office of Inspector General issued a report that covered some of the reasons
cited for non-participation: “D Block Investigation,” April 25, 2008 at
[http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-281791A1.pdf]. Viewed April
28, 2008.
9 A hearing on the outcome of the auction, with emphasis on the D Block, was held by the
House Committee on Energy and Commerce, Subcommittee on Telecommunications and
the Internet on April 15, 2008: “Oversight of the Federal Communications Commission -
The 700 MHz Auction.” Hearings and comments by members of Congress before the
auction occurred also raised concerns about possible problems with auction rules.

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CRS-4
public-private partnership intact. This course assumes that the
business case for the public-private partnership is sound and
changing auction rules, without changing the structure of the
partnership, will be sufficient to attract a bidder.

! Eliminate the network sharing requirement, while empowering
public safety to negotiate independently for public-private
partnerships or other sharing agreements, and auction the D Block
license without the public safety requirements. This course assumes
that there is a common structure that will enable different entities to
collaborate successfully to construct a nationwide capability for
public safety interoperability.
! Use federal funds to build a public safety network. This course is
usually predicated on using proceeds from the auction of 700 MHz
frequencies and assumes that there are sufficient funds and a
management structure to achieve the goal. This course notably
requires Congressional action to authorize expenditures.
! Choose a different organizational structure for managing a public
safety network that shares resources and infrastructure with
commercial and other spectrum-license holders. This course
requires Congressional action to authorize expenditures and may
further require legislation to provide the organizational structure.
These solutions are not mutually exclusive and several proposals combine
different elements.
Modify the Auction Rules. At a hearing on April 15, 2008, all five FCC
commissioners affirmed their support for re-auctioning the D Block under rules that
would produce a winning bidder and provide a commercial partner for public
safety.10 Their remarks also indicated the intention of the FCC to maintain and
increase its oversight role in supervising the public-private partnership. The rule
changes for the auction could be modifications of requirements for the D-Block
winning bidder — such as lowering the reserve price or eliminating the financial
penalty for failure to negotiate a completed Network Sharing Agreement — or they
could include, for example, changes in the network sharing agreement or the terms
applicable to the Public Safety Broadband Licensee (PSBL). It has been suggested
by some that the network sharing agreement will be reworked to accommodate the
strongest potential bidders.11
10 Oral and written testimony, “Oversight of the Federal Communications Commission - The
700 MHz Auction,” April 15, 2008.
11 For example, Washington Telecom, Media & Tech Insider, by Blair Levin, Rebecca
Arbogast, and David Kaut, April 18, 2008. “With competitors either struggling or less
motivated to build a new network, AT&T and particularly Verizon appear to be in the best
position to negotiate terms and bid on the spectrum.”

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CRS-5
Eliminate the Network Sharing Agreement. Another course of action
that has been proposed is to re-auction the D Block without encumbrances. These
encumbrances include provisions that require paying up to $10 million to cover
rebanding costs in the 700 MHz band; expensive build-out requirements; and the
network sharing agreement. Some proposals would eliminate the network sharing
agreement entirely, offering the D Block as a commercial license under terms similar
to the other blocks of licenses assigned through Auction 73.12
Use Federal Funds to Build a Public Safety Network. In conjunction
with recommendations to re-auction the D Block without encumbrances, many are
suggesting that surplus funds from Auction 73 and possibly other auctions be used
to build a public safety network. In oral testimony, FCC Chairman Kevin J. Martin
referred to the Public Safety Interoperability Implementation Act (H.R. 3116,
Representative Stupak), which would use spectrum license auction proceeds to fund
public safety communications, as an example of a mechanism to provide funding.13
FCC Chairman Kevin J. Martin14 and Commissioner Michael J. Copps15 testified that
they preferred a solution that used federal funds to meet public safety needs for a
nationwide, interoperable network. Absent financial support from the federal
government for a public safety network, they testified, the FCC has sought to craft
a solution that would use private sector funds to build the needed network.16
Recommendations for using spectrum proceeds to fund a nationwide interoperable
network have generally not provided details about how the funds would be
distributed to build such a network.
Choose a Different Organizational Structure. Some solutions envision
a different structure for managing a shared network that would reduce — but not
eliminate — the role of the Public Safety Broadband Licensee.
! Cooperative organization: multiple public safety partners. The
obligation of the public-private partnership would be to build an
interoperable backbone at 700 MHz that regional, state, and local
12 Among those urging this course in testimony were Coleman Bazilon
[http://energycommerce.house.gov/cmte_mtgs/110-ti-hrg.041508.Bazelon-testimony.pdf]
and Steven E. Zipperstein [http://energycommerce.house.gov/cmte_mtgs/110-ti-hrg.041508.
Zipperstein-testimony.pdf]; “Oversight of the Federal Communications Commission - The
700 MHz Auction,” April 15, 2008.
13 “Oversight of the Federal Communications Commission - The 700 MHz Auction,” April
15, 2008. For background, see CRS Report RS21508, Spectrum Management and Special
Funds, by Linda K. Moore.
14 Written and oral testimony [http://energycommerce.house.gov/cmte_mtgs/110-ti-hrg.
041508.Martin-testimony.pdf]; “Oversight of the Federal Communications Commission -
The 700 MHz Auction,” April 15, 2008.
15 Written and oral testimony [http://energycommerce.house.gov/cmte_mtgs/110-ti-hrg.
041508.Copps-testimony.pdf]; “Oversight of the Federal Communications Commission -
The 700 MHz Auction,” April 15, 2008.
16 For an overview of federal funding for public safety communications, see CRS Report
RL33747, Emergency Communications Legislation: Implications for the 110th Congress and
CRS Report RL32594, Public Safety Communications Policy, both by Linda K. Moore.

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CRS-6
networks could connect to in times of large-scale emergencies. This
would require a smaller financial commitment from the commercial
partner and a greater level of participation by state and local agencies
that would build out and control access to their parts of the network17
Network builders and operators would collaborate on solutions to
provide interoperability. Appropriated funds for public safety might
be distributed through existing grant programs.18 The commercial
network might be the dominant partner, working with hundreds of
public safety collaborators, and would therefore probably take the
lead in investment and technology decisions.
! Cooperative organization: multiple commercial partners. Instead of
a single D Block partner, with a national license, licenses could be
assigned to a hundred or more commercial partners with licenses for
local markets and rural coverage. In this case, the public safety
partner would take the lead in designing the network and choosing
the technology and standards to which the commercial partners
would be required to build. Conceivably, the FCC could fill the role
of network designer, setting standards through rule-making.
! Federal agency. The network sharing agreement would place greater
emphasis on the competitive position of the commercial partner.
Federal funds, administered primarily through existing programs
within the Department of Homeland Security, could be used to build
parts of the interoperable backbone at 700 MHz customers. The
federal government’s role in structuring the agreement would be
minimized and replaced by greater support and participation through
funding. To assure the economic viability of the public safety
network, the federal government might identify federal programs
that could participate as network customers.19
! Federal corporation. While assuring the same broad-based
participation of public safety agencies through a board of directors,
a federally chartered corporation, federally chartered not-for-profit
corporation, or some quasi-federal organization would be able to
hire skilled professionals to operate the network. Funding could
come from appropriations for that purpose, through empowerment
to raise funds, or a combination of funding tools. The Public Safety
Broadband License could remain with the not-for-profit corporation
that currently holds the license, the Public Safety Spectrum Trust, or
17 See, for example, testimony of Deputy Chief Charles F. Dowd [http://energycommerce.
house.gov/cmte_mtgs/110-ti-hrg.041508.Dowd-testimony.pdf]; “Oversight of the Federal
Communications Commission - The 700 MHz Auction,” April 15, 2008.
18 For information on existing programs, see CRS Report RS22596, FY2008 Appropriations
for State and Local Homeland Security, by Shawn Reese.
19 See, for example, written testimony submitted for the record by Karen P. Tandy, Senior
Vice President, Motorola, Inc.;”Oversight of the Federal Communications Commission -
The 700 MHz Auction,” April 15, 2008.

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CRS-7
could be re-assigned. Laws governing corporate conduct and
Congressional oversight would replace the regulatory and oversight
roles the FCC crafted through the mechanism of auction rules.20
! New public safety network. Although it is outside the power of the
FCC to assign the D Block to public safety, with the assistance of
Congress it would be possible to create a broadband network for
public safety at 700 MHz using the existing Public Safety
Broadband License and the D Block.
The above is indicative of the possibilities available to the FCC and to
Congress. Without additional authority from Congress, the FCC is limited to
directing the outcome almost exclusively through modifications to spectrum band
plans, auction rules, service rules, and the network sharing agreement.
The FCC has requested comments on options available to it in a notice of
proposed rulemaking.21 It seeks opinions and information on a wide range of
questions covering such topics as: provisions and eligibility for using the Public
Safety Broadband License; revisions to the public-private partnership, negotiation of
the Network Sharing Agreement; structuring the new auction of the D Block;
relocation costs and deadlines for changes in 700 MHz frequency assignments;
service rules for the D Block; and other opportunities for providing broadband
wireless access for public safety.
The next section provides an overview of steps taken by the FCC preceding
Auction 73. These are among the key provisions that the FCC is reviewing and may
change.
The Public-Private Partnership: FCC Efforts
Since it initiated auctions in 1994, the FCC has consistently provided auction
rules that allow it to establish financial requirements for potential bidders, to set aside
licenses for specific classes of bidders, to provide economic incentives, and to use
other tools for managing the auction process.22
In addition to setting up rules for the auctions it conducts, the FCC also
establishes and enforces service rules for the use of licenses. Among the provisions
of service rules for advanced wireless services there is typically a requirement that
licenses be put to use within a specific number of years. Service rules can also be
20 Several CRS reports discuss federal government corporations and quasi-governmental
organizations, including CRS Report RL30365, Federal Government Corporations: An
Overview, and CRS Report RL30533, The Quasi Government: Hybrid Organizations with
Both Government and Private Sector Legal Charters, both by Kevin Kosar.
21 FCC, Second Further Notice of Proposed Rulemaking, Released May 14, 2008, PS Docket
No. 06-229 at [http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-08-128A1.pdf].
22 See CRS Report RL31764, Spectrum Management: Auctions, by Linda K. Moore.

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CRS-8
used to specify technologies, uses, or users. For Auction 73, the FCC expanded the
scope of its service rules to include a plan that would mandate spectrum sharing
between a public safety spectrum license holder and a commercial licensee. The
commercial licensee would be obligated to build a network to satisfy public safety
needs as well as those of its commercial customers.
Regulatory Governance Through Service Rules
The FCC followed past procedures in the creation of service rules to establish
the structure for a public-private partnership as part of its preparation for the auction
of licenses in the 700 MHz band. In its review of background and discussion of its
decisions, in the Second Report and Order, the FCC tried to anticipate the problems
that might arise in building and operating a shared network and to preclude
difficulties by providing a regulatory framework that sets and enforces rules and
requirements. The regulatory framework for a public-private partnership comprises
sets of binding requirements for organization, performance, and compliance for three
interlocking components:
! Public Safety Broadband Licensee holding 10 MHz of spectrum at
700 MHz.
! Commercial partner, the winning bidder for the D Block, a national
license for 10 MHz of spectrum at 700 MHz.
! Network Sharing Agreement (NSA) that the two licensees would be
required to create in order to build and manage a shared network.

As elaborated in the rules, all three of these components must be tailored to
meet guidelines set by the FCC. Contracts and other legal agreements would be
approved by the FCC;23 compliance would be subject to oversight;24 and disputes
would be resolved through the FCC, in accordance with the Communications Act of
1934, or through litigation.25
The following overview of the FCC’s Second Report and Order, and subsequent
orders, highlights issues for policy makers that regard public safety communications.
This report is not an exhaustive study of all provisions that pertain to public safety
nor does it cover the parts of the order dealing with the purely commercial licenses
that were subsequently auctioned.26
23 As stipulated in the rules covering both of the licensees and the Network Sharing
Agreement. See discussion in text of this report.
24 FCC, Second Report and Order, released August 10, 2007, paragraph 523.
25 Ibid., paragraph 529. Possible recourse for failure to complete a Network Sharing
Agreement are discussed in paragraphs 508 and 509.
26 See CRS Report RL31764, Spectrum Management: Auctions, by Linda K. Moore.

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CRS-9
Public Safety Broadband License
Congress directed the FCC to allocate 24 MHz of spectrum within the 700 MHz
band for public safety use as part of the transition from analog to digital television,
which would free these airwaves.27 The initial planning for public safety use of
frequencies at 700 MHz began in 1997 and concluded with the submission of the
final report of the Public Safety National Coordination Committee (NCC) in 2003.
The NCC operated as a Federal Advisory Committee28 to the FCC, developing
technical and operational standards for the 700 MHz band and structuring the
management of licenses through regional committees. The existing governance for
these channels is made up of 55 Regional Planning Committees (RPCs), loosely
coordinated through the efforts of the National Public Safety Telecommunications
Council (NPSTC).29
The band plan originally intended to carry public safety radio traffic at 700 MHz
has been revised to create two different licensing approaches. With the support of
NPSTC30 and others, the FCC negotiated modifications to the band plan that reflect
changes in technology and public safety needs. One block of the revised band plan
is designated for narrowband (primarily voice) applications and the other for
broadband applications. Channels have been reassigned to support narrowband
operations in 12 MHz of paired spectrum, at 769 - 775 MHz and 799 - 805MHz.31
These channels will be administered by states and localities through the existing
regional committee structure. All RPCs with approved band plans are required by
the FCC rule making to submit amended band plans.32 The networks built on the
narrowband frequencies will be financed through long-standing procedures that use
a combination of local, state, and federal funds.
Spectrum is to be allocated for broadband communications (high speed data
transmission, video, and voice) in 10 MHz of frequencies at 763 - 768 MHz and 793
- 798 MHz.33 These frequencies are to be assigned to the Public Safety Broadband
Licensee that would also be responsible for the administration of two guard bands,
27 The Balanced Budget Act of 1997, 47 U.S.C. § 309 (j) (14). For a discussion of the DTV
transition see CRS Report RL34165, The Transition to Digital Television: Is America
Ready? by Lennard G. Kruger.
28 The role and organization of Federal Advisory Committees is addressed in CRS Report
RL30260, Federal Advisory Committees: A Primer, by Stephanie Smith.
29 See [http://www.npstc.org/index.jsp]. Viewed January 17, 2008.
30 See, for example, NPSTC position paper on 700 MHz, released July 6, 2007, at
[http://www.npstc.org/documents/NPSTC%20Public%20Safety%20700%20MHz%20
Position%20Paper%2007052007.pdf]. Viewed January 17, 2008.
31 Second Report and Order, paragraph 322.
32 Ibid., paragraph 346.
33 Ibid., paragraph 322.

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CRS-10
each covering one megahertz, at 768 - 769 MHz and 798 - 799 MHz.34 Guard bands
are created to act as buffers against interference from other operations on nearby
frequencies.
In order to accommodate the new band plan, some public safety network
operators will have to modify equipment already purchased for use on 700 MHz
frequencies. Some of the cost of these changes would be covered by the commercial
D Block licensee.35 (Discussed below, in section on 700 MHz rebanding.)
Requirements for the Public Safety Broadband Licensee
The public safety licensee would be obligated to meet a number of requirements.
These requirements focus mainly on three areas: the formation of a not-for-profit
corporation to hold the license; the responsibilities of this non-profit organization —
including establishing standards and participating in the creation of the Network
Sharing Agreement; and compliance. The cost of building the national network using
the spectrum held by the broadband licensee would be shouldered by its commercial
partner, although there could be system enhancements or other components funded
by the public sector.
Selection and Establishment of the Public Safety Broadband
Licensee
The FCC selected the Public Safety Broadband Licensee, based on criteria such
as not-for-profit corporate status; absence of commercial interests, either in the
holding of the license or its management; and broad representation of public safety
entities.36 In anticipation of receiving the public safety license, a group of public
safety associations formed the Public Safety Spectrum Trust Corporation (PSST).
The Trust hired Cyren Call Communications Corporation to act as its advisor and
liaison in negotiating with the D Block licensee. The PSST was subsequently
awarded the nationwide Public Safety Broadband License.37
Board of Directors. Representation on the Board of the Directors of the
Public Safety Broadband Licensee is to consist of members from named
organizations representing public safety. In the Second Report and Order, the FCC
provided a list of 11 organizations designated to appoint board members and allowed
for two at-large members, creating a board of 13 members.38 In a later Order on
Reconsideration,39 the FCC changed the composition of the board, adding three
representatives from named organizations, eliminating one representative, and
34 Ibid., paragraph 322.
35 Ibid., paragraph 322.
36 Ibid., paragraph 373.
37 FCC, Order, November 19, 2007, PS Docket No. 06-299.
38 Second Report and Order, paragraph 374.
39 FCC, Order on Reconsideration, September 24, 2007, WT Docket No. 96-86.

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CRS-11
increasing the number of at-large members from two to four.40 Four at-large
members were subsequently selected jointly by the FCC bureaux for Public Safety
and Homeland Security and for Wireless Telecommunications.41 The FCC chose to
eliminate National Public Safety Telecommunications Council (NPSTC) as a named
member of the board because of the overlap of its membership with the composition
of the associations that were given permanent status on the board.42

Oversight. As part of the FCC’s oversight, PSST, as selected licensee, would
be required to file quarterly financial reports with the FCC, with copies to the chiefs
of the Public Safety and Homeland Security Bureau and the Wireless
Telecommunications Bureau.43 This requirement would take affect after the NSA
had been negotiated. The licensee must meet criteria for its articles of incorporation
and bylaws, as specified in the Second Report and Order rules.44 The FCC has
judged that it is appropriate for it to provide, as needed, “extensive” oversight to
ensure that these corporate governance stipulations would be met.45
Right to Revoke License. The FCC considered a number of options to
assure that the public safety license holder would receive the level of services needed
for a robust emergency communications network. Suggestions that the public safety
licensee be able to request the reassignment or re-auction of the D Block license, if
40 Current list of 15 members provides for a board consists of representatives for: the
Association of Public-Safety Communications Officials - International (APCO), the
National Emergency Number Association (NENA), the International Association of Fire
Chiefs (IAFC), the International Association of Chiefs of Police (IACP), the International
City/County Management Association (ICMA); the National Governors Association (NGA);
the National Association of State EMS Officials (NASEMSO); the Forestry Conservation
Communications Association (FCCA); the American Association of State Highway and
Transportation Officials (AASHTO); and the International Municipal Signal Association
(IMSA), the American Hospital Association (AHA), the National Fraternal Order of Police
(NFOP), the National Association of State 9-1-1 Administrators (NASNA), the National
Emergency Management Association (NEMA) and the National Sheriffs’ Association
(NSA).
41 FCC, Public Notice, “Public Safety and Homeland Security Bureau and Wireless
Telecommunications Bureau Announce the Four At-Large Members of the Public Safety
Broadband Licensee’s Board of Directors,” November 9, 2007, DA 07-4593.
42 Order on Reconsideration, paragraph 5. NPSTC membership includes a governing board
with representation from these associations that are to be represented on the board of the
public safety licensee organization: AASHTO, APCO, FCCA, IACP, and IMSA. The board
is advised by liaison organizations that include, the FCC, the NTIA, FEMA, DHS offices
of Emergency Communications and of Interoperability and Compatibility, SAFECOM (also
from DHS), the departments of Agriculture, Interior, and Justice, and the
Telecommunications Industry Association (TIA). For more information on membership and
organizational structure, see [http://www.npstc.org/orgchart.jsp]. Viewed January 17, 2008.
43 Second Report and Order, paragraph 377.
44 Ibid., paragraph 375.
45 Ibid., paragraph 376.

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CRS-12
cooperation and progress was deemed unsatisfactory, were rejected.46 The FCC has
reserved for itself the right to re-assign the commercial license, if necessary, under
circumstances detailed in the rule making.47 It also has asserted its authority to
revoke the license awarded to the Public Safety Broadband Licensee if it fails to meet
its obligations under the Network Sharing Agreement or otherwise does not comply
with FCC rules and regulations.48
Duration of License. Unless revoked, the public safety license would be
valid for ten years, effective February 17, 2009, the scheduled date on which analog
television broadcasts on the 700 MHz band must end. The license would be
renewable.49
Obligations of the Public Safety Licensee

The selected public safety licensee, having met the initial requirements for
qualification, would have additional tasks set for it by the FCC. General
responsibilities would include:50
! Negotiate a Network Sharing Agreement with its commercial
partner, the qualifying, winning bidder for the D Block.
! Administer access to the network for public safety users, including
assessment of usage fees.
! Represent the interests of its public safety constituents that utilize
the network.
! Negotiate purchase agreements with vendors that provide savings
through economies of scale, or other benefits. This responsibility
does not limit the licensee’s right to determine and approve
equipment specifications.
! Approve, in consultation with D Block licensee, the equipment and
applications that may be used on the network. The licensee has the
sole authority to determine the acceptability of equipment or
applications. State and local entities must seek approval from the
licensee before linking their systems or equipment to the broadband
network.
! Coordinate stations accessing narrowband and broadband
frequencies.
! Oversee and implement the relocation of some users required by
rebanding of parts of the 700 MHz band.
! Decide, at its sole discretion, whether or not to allow federal public
safety agencies access to the broadband network.
46 Second Report and Order, paragraph 509.
47 Ibid., paragraphs 509 and 523 - 526.
48 Ibid., paragraph 527.
49 Ibid., paragraph 385.
50 Ibid., paragraph 383.

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CRS-13
! Review requests for construction or use of wideband networks in
areas that will not be served by the new broadband network.
(Wideband refers to enhanced narrowband systems that allow for
some data transmissions in addition to voice communications.)
! Facilitate negotiations to build network sites on public land owned
by states or localities.
The Commercial Partner

The intended commercial partner in the public-private partnership would be the
winning bidder for Block D. The FCC ruled that eligible bidders for Block D in
Auction 73 that qualified as small businesses under existing FCC rules would be
entitled to a bidding credit (a reduction in the amount due on the wining bid) of 15%
for companies with average attributable gross revenues of $40 million in the past
three years and 25% for companies with average annual earnings of no more than $15
million.51 Many start-up companies could have qualified as designated entities under
this designation.
D Block License
The D Block designates frequencies at 758 - 763 MHz and 788 - 793 MHz, a
total of 10 MHz. In Auction 73 it was offered as a single, nationwide license.52
Minimum Bids. The FCC directed the Wireless Telecommunications Bureau
to set reserve prices for each block of licenses to be auctioned.53 It suggested that
the reserve price for the D Block be set at $1.33 billion. Based on winning bids for
a previous auction, the D Block had a presumed value of $1.7 billion but the FCC
rules recommended that the amount be discounted to reflect the additional service
rules and requirements for the D Block license holder.54
Assignment of License: Network Sharing Agreement. The winning
bidder would not be assigned the D Block license until it had met specific
requirements established by the FCC such as completion of a Network Sharing
Agreement with the Public Safety Broadband Licensee.55 The negotiations for the
NSA were to begin on the date that the winning bidder files its long form application
(post-auction, the long form provides additional information pertaining to each
license won at auction). The FCC required that, within six months from that date,
51 Ibid., paragraph 536.
52 Ibid., paragraph 65.
53 Ibid., paragraph 304. The Wireless Telecommunications Bureau subsequently set the
reserve price for Block D at $1.33 billion in a notice released October 5, 2007: “Auction of
700 MHz Band Licenses Scheduled for January 24, 2008,” DA-074171, AU Docket No. 07-
157.
54 Ibid., paragraph 305.
55 Ibid., paragraphs 314 and 448.

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CRS-14
the NSA was to be completed by the negotiating parties and approved by the FCC.56
The FCC also required a separate agreement that would grant the Public Safety
Broadband Licensee 1) right of first refusal if network assets are to be sold and 2) the
option to purchase the network assets at fair market value if the D Block license is
cancelled or terminated.57
Timetable for Negotiations. Under the auction rules as they currently stand,
the winning bidder for the D Block would be required to file a report with the FCC,
within ten days of the commencement of negotiations for the NSA, certifying that
good faith negotiations have begun and are being actively pursued. A timetable of
at least the first 30 days of negotiation meetings would be provided at that time.
After three months, both licensees would begin to provide detailed monthly reports
on negotiations. The FCC could demand additional reports as needed. Two
members of the FCC staff would be present as neutral observers at all stages of the
negotiation.58
Assignment of License: Corporate Structure. Another requirement for
receiving the D Block license would be the formation of separate legal entities, one
to hold the D Block license, one to own the network assets, and one to serve as an
operating company. The operating company would enter into agreements to lease
spectrum rights from the company owning the D Block and to lease secondary rights
to the public safety spectrum.59 These companies must be “bankruptcy remote,” as
attested to by bankruptcy counsel retained by the D Block license winner.60 A typical
corporate structure that would be bankruptcy remote could consist of a holding
company and subsidiary companies with the assets of each company protected from
the possible insolvency of any other company in the group. Other specific-purpose
companies might also be included within the corporate structure. All must be
approved by the FCC.
The commercial partner in the public-private partnership would therefore be a
corporate structure comprised of quasi-independent companies, each with a
designated function. These entities and any leasing or other commercial agreements
created to implement the partnership would be “subject to the Communications Act,
as amended, and the Commission’s rules and regulations.”61 The parties to this
corporate structure and its various components, as required or authorized by the FCC,
would have the responsibility to build out the shared network, as specified in the
Network Sharing Agreement and the FCC rule making.62
56 Measures to be taken if the agreement is not completed within six months are outlined in
the Second Report and Order, especially paragraphs 504 and 508.
57 Second Report and Order, paragraph 525.
58 Ibid., paragraphs 506 and 507.
59 Ibid., paragraph 520.
60 Ibid., paragraph 518.
61 Ibid., paragraph 518.
62 Ibid., paragraph 519.

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Cancellation of License. Failure to meet the obligations of the NSA,
network build out deadlines, or other rules established by the FCC could lead to the
revocation of all or part of the D Block license and its reassignment by the FCC.63
Cancellation would be treated as a default on the part of the license-holder, which
would be obligated to pay a penalty, set at 10% of the auction price, if successfully
auctioned in Auction 73.64
Duration of License. Unless revoked, the D Block license would be valid
for ten years, effective February 17, 2009, the scheduled date on which analog
television broadcasts on the 700 MHz band must end. As long as the licensee
complies with the rules established by the FCC, it would be eligible to apply for
license renewal.65
Network Build Out and Performance Levels
The commercial corporation formed as required by the FCC would be fully
responsible for building the public safety network, using spectrum held by the public
safety licensee and the D Block license holder.66 This build out would conform to
FCC requirements and to specific requirements negotiated with the public safety
licensee in the Network Sharing Agreement.67 Modifications to these requirements
could be permitted, subject to approval of all parties concerned, including the FCC.68
Build Out Benchmarks. The FCC established benchmarks for a population-
based build out. The first benchmark would be four years from February 2009, by
which time the network should reach 75% of the population to be served by the
national D Block license. By the end of seven years (2016), 95% of the population,
nationwide, could have coverage. At the end of ten years (2019), 99.3% of the
population would be covered. Population measurements would be based on currently
available U.S. Census data.69
To assure the FCC’s minimum standards for coverage would be met, it required
the NSA to include a build-out schedule for major highways, interstates, and
incorporated communities with a population over 3,000.70 To monitor progress in
63 Ibid., paragraph 522.
64 FCC, Public Notice, “Revised Procedures for Auctions 73 and 76: Additional Default
Payment for D Block Set at Ten Percent of Winning Bid Amount; Disputed Issues in the
Negotiation of Network Sharing Agreement,” November 2, 2007, DA 07-4514 at
[http://hraunfoss.fcc.gov/edocs_public/attachmatch/DA-07-4514A1.pdf].
65 Ibid., paragraphs 457-459.
66 Ibid., paragraph 366.
67 Ibid., paragraph 438.
68 Ibid., paragraphs 386 and 443.
69 Ibid., paragraph 437.
70 Ibid., paragraph 440.

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CRS-16
build outs to specific areas, the FCC further required an estimated cost for each
area.71
The D Block licensee would have the responsibility of confirming to the FCC
that the benchmarks have been met. Failure to meet benchmark deadlines could lead
to cancellation of the license.72
Performance Guarantees. To bolster coverage in rural areas, the D Block
licensee would be required to offer at least one handset that included an integrated
satellite solution for public safety use.73 The D Block licensee would also have to
provide sufficient robustness in signal carriage to assure that population coverage
requirements were met, as well as the coverage and availability requirements
established in the NSA. The NSA would establish requirements for service to public
safety users and for network performance and reliability. The D Block licensee
would be prohibited by the FCC from discontinuing or degrading service to its public
safety customers unless the change has either been requested by the network users or
approved by the FCC.74
Network Sharing Agreement
The Network Sharing Agreement (NSA) was created to be the keystone of the
public-private partnership; its rules are to be the contractual mortar uniting the two
licensees. Adherence to the agreement had been set as a regulatory condition for both
the commercial and the public safety licensees.75 The FCC would review the NSA
and must approve all of its components.76 Although the FCC would allow the two
parties leeway in negotiating the agreement, it has set various requirements, such as
network coverage requirements noted above, that must be included in the NSA. In
particular the FCC included minimum standards for the network as part of the Second
Report and Order.77
FCC Network Requirements
To assure that the network meets the needs of public safety, the FCC established
a list of requirements that it wanted addressed through the NSA. These are:
71 Ibid., paragraph 453.
72 Ibid., paragraph 443.
73 Ibid., paragraph 438.
74 Ibid., paragraph 521.
75 Ibid., paragraph 448.
76 Ibid., paragraph 364.
77 Ibid., paragraph 405.

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! Specifications for a platform that provides broadband mobile voice,
video, and data and includes current and evolving technologies that
have features for public safety users, as well as commercial uses.
! Specifications that assure communications interoperability across
agencies, jurisdictions, and geographic areas.
! Sufficient signal coverage to meet public safety standards, such as
service reliability of 99.7% or better.
! Sufficient robustness to meet reliability and performance standards
of public safety, including features such as hardening of
transmission facilities and antenna towers to withstand harsh
weather and disaster conditions and back-up power to maintain
operations for “an extended period of time.”
! Sufficient capacity to meet the needs of public safety during
emergency situations and periods of heavy usage without degrading
service, for example by blocking calls or slowing transmissions.
The FCC’s expectation is that the network would use spectrum
efficient technologies to achieve this.
! State-of-the-art security and encryption technologies.
! Automatic prioritization of public safety communications over
commercial uses in real time, and prioritization of public safety
communications by type, with the highest priorities going to safety
of life and property, and to homeland security.
! Capabilities consistent with current and evolving operational needs
of public safety for specific features, such as push-to-talk, that meet
the specifications of the Public Safety Broadband Licensee.
! Operational control of the public safety network by the Public Safety
Broadband Licensee “to the extent necessary to ensure public safety
requirements are met.”
! Right of the Public Safety Broadband Licensee 1) to determine and
approve the specifications of public safety equipment that is used on
the network and 2) to purchase its own subscriber equipment from
any vendor.
! Provision, by the D Block Licensee, of at least one integrated
handset for public safety use that works on 700 MHz and satellite
frequencies.78
! Adoption of a common standard for nationwide broadband
interoperability that must be used by all public safety users that
participate in the network.79
Other Obligations and Stipulations
Guidelines and obligations were stipulated by the FCC in its rule making. Both
licensees must agree to act in good faith in their negotiations to create the Network
78 This and preceding bullet points are covered in Second Report and Order, paragraph 405.
79 Ibid., paragraph 364.

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CRS-18
Sharing Agreement.80 Other components of the NSA covered by FCC rules include
the establishment of a fee structure and the duration of the agreement.
Fees. The FCC ruled that all service fees must be specified in the NSA. These
fees would include fees for normal network service and for priority access to
commercial spectrum capacity in times of emergency. The FCC opined that the two
licensees should be left to negotiate “reasonable rates” in good faith, and provided
examples of what it considered to be reasonable. These included expectations that
the fee structure would have “financial incentives for the commercial licensee” based
on the number of subscribers from the public safety sector and that priority access
fees would be structured to protect public safety participants from unforeseen or
unbudgeted payment obligations.81 Other guidelines for a reasonable pricing
structure would include affordable rates that are priced in line with comparable
commercial services, but at lower rates for public safety.82 The FCC’s stated
expectation was that the D Block licensee, when negotiating fees with its public
safety partner, would provide terms that best serve the public safety goals established
in the Second Report and Order. The FCC reiterated some of the tools available to
it to ensure that NSA disputes would be resolved, which it can apply to assure that
the fees charged meet its expectations of what is reasonable.83
Duration of Agreement. The NSA would be in effect for a term not to
exceed ten years, beginning February 17, 2009. This term corresponds to the
duration of the D Block license. The NSA may be renewed along with the D Block
license. The FCC would decide whether to renew or modify the NSA at the same
time that it considers renewal of the D Block license.84
Modification of the Agreement. Modifications to the NSA or other
agreements that are part of the public-private partnership structure must be approved
by the FCC Commissioners, in case of major changes, or by the Chiefs of the
Wireless Bureau and the Public Safety and Homeland Security. Approval must be
received in advance of any action, after both licensee partners have agreed to the
modifications.85
Rules for Managing Spectrum
Under the current rules, the Public Safety Broadband Licensee is authorized by
the FCC to lease access to the frequencies covered by its license exclusively to the
80 Ibid., paragraph 447.
81 Ibid., paragraph 450.
82 Ibid., paragraph 451.
83 Ibid., paragraph 452.
84 Ibid., paragraph 449.
85 Ibid., paragraph 454.

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D Block licensee, on a secondary, unconditionally preemptible basis.86 This means
that the D Block network commercial users would be able to transmit on available
frequencies in the public safety band only when there is no demand from the primary,
public safety users, and that any demand from public safety is to be immediately met
by terminating the commercial traffic and yielding to the public safety user. This
privilege of secondary access would be accorded to the D Block licensee as part of
the interlocking agreements that constitute the public-private partnership.87 For
example, the Public Safety Broadband Licensee would be required to lease spectrum
to the D Block licensee, and the D Block licensee would be required to build a
network for public safety use.88 The FCC has required a spectrum manager leasing
arrangement for the full term of the ten-year license. This form of lease would place
the responsibility for compliance fully on the lessee, the D Block license holder.89
As part of its spectrum management obligations, the D Block licensee would be
required to assure that public safety users would not experience harmful interference,
interruption, or degradation of service due to commercial operations in the public
safety spectrum band. One prerequisite for this level of assurance would be a
requirement by the FCC that the network be designed to assign priority to first
responders automatically, with immediate preemption or exclusion from access to the
network by commercial users.90
In return for allowing commercial usage of its bandwidth, public safety would
have the right to real time access, on an emergency basis, of the spectrum licensed
to the D Block.91 The obligation to provide this priority access was one of the service
rules attached to the D Block license for Auction 73. The definition of what
constitutes an emergency would be part of the NSA. In situations not covered by the
NSA, where an agreement between the two licensees about what constitutes an
emergency cannot be reached, the public safety licensee could appeal to the FCC to
declare that an emergency exists that requires access to D Block frequencies.92
Rebanding Public Safety Spectrum at 700 MHz
In order to accommodate both narrowband and broadband networks for public
safety, the FCC revised the original band plan for the 24 MHz allocated to public
safety.93 In addition to opening the way for a shared spectrum agreement between the
public safety community and the private sector, the FCC resolved other spectrum
management issues that are not discussed in this summarizing report. Among the
86 Ibid., paragraph 414.
87 Ibid., paragraph 416.
88 Ibid., paragraph 415.
89 Ibid., paragraph 417.
90 Ibid., paragraph 418.
91 Ibid., paragraph 426.
92 Ibid., paragraph 427.
93 Ibid., paragraphs 325 - 326.

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FCC decisions of consequence to the operation of public safety networks in the 700
MHz band are:
! Move some networks already in the preliminary stages of build out,
requiring a certain number of technical adjustments to equipment
and software.
! Require the D Block licensee to pay for the costs of these
adjustments.
! Cap at $10 million the amount of allowable reimbursement to public
safety network operators by the D Block licensee.
! Prohibit new operations of narrowband systems on 700 MHz public
safety networks that will be relocated as a consequence of the
rebanding.
! Limit building and use of wideband networks.
Relocating Public Safety Networks
The new band plan for public safety in the 700 MHz band has created two
separate sets of paired spectrum blocks. One set of paired frequencies will be used
for narrowband communications, the other set has been designated for the new,
broadband network to be built by the public-private partnership. Because parts of the
700 MHz band intended for public safety use are not encumbered by broadcasters,
some states have begun to build narrowband networks that use the 700 MHz
capacity. Base stations and radios will have to be modified if they have already been
programmed to operate on frequencies that are being reassigned to the broadband
network. The FCC has required that these frequencies be vacated by February 17,
2009, or as soon after that date as possible, so that they will be immediately available
for broadband use.94
Costs Associated With the Relocation. As part of the rule making
process, Motorola, Inc., a leading provider of public safety equipment, provided the
FCC with a cost estimate for a rebanding plan proposed by the NPSTC.95 The
NPSTC plan would have covered equipment already installed, on order, or planned.
Motorola set the cost of the retuning at $9.45 million, which amount would cover all
installations projected to be in place by July 2008.96 The FCC decided that the D
Block licensee would be obligated to cover the costs of rebanding 97 but took several
measures to control the cost. A cap of $10 million in reimbursements was
established. To assure that costs stayed below that threshold, the FCC ruled that only
systems and radios in operation as of 30 days after the adoption of the Second Report
and Order would be covered. The cut-off date, therefore, was August 30, 2007. By
limiting the number of base stations and radios that would have to be reprogrammed,
the FCC figured that the estimated cost would be around $6 million, based on a pro-
94 Ibid., paragraph 332.
95 Letter from the National Public Safety Telecommunications Council, June 25, 1007, WT
Docket No. 96-86.
96 Letter filed by Motorola, Inc., June 29, 2007, WT Docket No. 96-86.
97 Second Report and Order, paragraph 336.

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CRS-21
rating of the cost assumptions presented by Motorola. The FCC reasoned that this
would provide leeway, if costs had been under-estimated, to assure that the total cost
remained under the $10 million cap.98
Freeze on New Operations. To further control costs for relocation
expenses, the FCC prohibited new operations on affected narrowband frequencies
after August 30, 2007.99
Determining Reimbursement of Costs. The FCC set out rules for
calculating actual costs and reimbursements. As with the negotiation of the Network
Sharing Agreement, the public safety licensee and the commercial D Block licensee
would be obligated to reach an agreement that must be reviewed and approved by the
FCC;100 the two licensees must prepare a plan for relocation and an agreement on
costs for rebanding. The licensees would be given 30 days to reach agreement on the
plan.101
To receive reimbursement, displaced public safety network operators must meet
a number of conditions. For example, they must provide information, accurate as of
August 30, 2007, accompanied with a certification of accuracy. This information
would cover:
! Total number of mobile narrowband mobile and portable handsets
in operation on the affected frequencies.
! Total number of base stations serving the narrowband handsets.
! Contact information for each identified set of handsets and base
stations.
! Geographical area of operation of mobile and portable units.
! The location of the base stations.
The D Block licensee would be responsible for reimbursing only the minimum
cost for necessary changes to base stations, mobiles, and portables, and not for any
unrelated improvements. Specifically, the FCC would not require the D Block
licensee to assume responsibility for costs related to reassigning channels or other
changes to the Regional Planning Committee plans.102 T h e r u l e m a k i n g d o e s
acknowledge the possibility that some reimbursement may be forthcoming for the
Public Safety Broadband Licensee’s cost related to the rebanding program.103
Paying Reimbursements. The D Block licensee and the public safety
licensee are expected to agree on the total costs (not, however, to exceed $10 million)
98 Ibid., paragraph 341.
99 Ibid., paragraph 339.
100 Ibid., paragraph 340. The Chief of the FCC’s Public Safety and Homeland Security
Bureau is assigned the responsibility of reviewing and approving the rebanding plan.
101 Ibid., paragraphs 336 and 504.
102 Ibid., paragraph 338.
103 Ibid., paragraph 342.

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CRS-22
that would be reimbursed for changes necessitated by rebanding. This amount must
be submitted to the FCC as part of the required relocation plan, with certification
from the two license holders and the relevant equipment vendors that all parties agree
to the negotiated prices and that no changes would be made.104 The amount, once
approved by the FCC, must be paid into a trust account established by the Public
Safety Broadband Licensee, no later than the date of execution of the Network
Sharing Agreement. The public safety licensee would have the responsibility of
administering the account and making payments in accordance with the agreed
reimbursement schedule. No payments can be made from the trust account, however,
until the D Block license has been conferred to the winning bidder.105 The winning
bidder for the license would be the provisional winner until all requirements set by
the FCC have been satisfied.
Wideband Operations
The FCC has ruled that public safety network operators wishing to operate
wideband systems (enhanced capacity for narrowband channels), must obtain a
waiver. The waiver request must contain an application for authorization; a letter
from the Public Safety Broadband Licensee confirming that the wideband operations
would not be inconsistent with broadband deployment plans; agreed upon conditions
of operation; a transition plan to the broadband network;106 and certification that it
would not seek reimbursement (from the D Block licensee) for costs incurred in a
future transition to broadband operations.107 Grants for waivers will only be given for
wideband operations within the narrowband frequencies; except under rare
circumstances, no wideband operations will be permitted in the broadband
frequencies.108 Devices used on the wideband network must be interoperable with
the broadband network.109 Licenses for operation granted for wideband operations
will be valid for five years.110
Congressional Oversight
In the Second Report and Order, the FCC assigned itself the role of champion
and protector for public safety interests, nationwide emergency communications, and
interoperable networks. Under the umbrella of the Communications Act, it would
undertake to monitor and regulate the actions of the Public Safety Broadband
Licensee and the companies formed to manage the obligations of the D Block license
holder. Congressional oversight of the public-private partnership therefore would be
104 Ibid., paragraph 342.
105 Ibid., paragraph 343.
106 Ibid., paragraph 491.
107 Ibid., paragraph 495.
108 Ibid., paragraph 492.
109 Ibid., paragraph 495.
110 Ibid., paragraph 496.

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CRS-23
placed squarely within the jurisdiction of the committees dealing with
telecommunications.111
Governance through Regulation
In extending the scope of its authority to write service rules for auctions,112 the
FCC has made a commitment to oversee and adjudicate the operation of a network
that, when completed, could have an asset value in the tens of billions of dollars. A
large part of that asset would be under the control of the Public Safety Broadband
Licensee, governed by its Board of Directors in accordance with FCC regulations.
Among the voting members of the board, as currently constituted, four have been
appointed directly by the FCC. In its plans for oversight of the public-private
partnership, the FCC has announced its intention of enforcing existing rules or
creating new rules as circumstances warrant in the future. Measures to enforce the
rules include litigation, revocation of license, or other means that might be supported
by a reading of the Communications Act.113 The role of Congress, in accepting this
arrangement, would be to provide guidance to the FCC commissioners through the
various means available to it.
111 Senate, Committee on Commerce, Science, and Transportation; House of
Representatives, Committee on Energy and Commerce.
112 The Balanced Budget Act of 1997 gives the FCC authority to conduct auctions, set
performance requirements, and evaluate the qualifications of licensees [47 U.S.C. § 309 (j),
especially, (3), (4) and (5)].
113 The FCC seems to presume private equity or hedge fund ownership of the D Block
companies as it does not mention how it would use the Communications Act to protect the
interests of shareholders in a publicly traded company.

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