Are Frontline, Cyren gaming the spectrum auction?

An editorial in The Wall Street Journal today contends that Frontline Wireless and Cyren Call are looking to game the FCC's upcoming 700Mhz spectrum auction for their own financial gain, under the guise of providing public safety services. Nextel co-founder Morgan O'Brien wants Congress and the FCC to grant 30Mhz of the available spectrum to his company Cyren Call, which it will use to help public safety agencies like police and fire departments as well as other first responders. Since Cyren Call is a for-profit venture, the editorial suggests it will also lease the spectrum to other wireless carriers. "We don't blame him for trying, but if Mr. O'Brien thinks the U.S. needs another wireless carrier, then he should bid for the spectrum at auction with everyone else," the editorial opines.

Reed Hundt, former FCC chairman under President Clinton, plans to participate in the auctions through his new company, Frontline Wireless. Hundt, however, wants to "encumber a portion of the spectrum with obligations that will drive down its value and make it less attractive to larger would-be bidders like Verizon, AT&T and the cable companies," according to the editorial. The requirements Hundt favors for auction winners, include: The spectrum must be used for a first responder network; winning bidders must operate as a wholesale-only carrier; and winning bidders must observe the rules of net neutrality. The hot button issue of net neutrality has helped Frontline win the support of various consumer groups, which have considerable sway over the Democrat-led Congress, according to the editorial.

FierceWireless welcomes any thoughts on the upcoming 700Mhz auction as well as reactions to the claims made in today's WSJ editorial. Feel free to leave a comment on this article using the button above or send us a note here [1].

For more on Cyren and Frontline:
- read the WSJ editorial [2] (sub. req.)