FCC denies group's request for rights to public airwaves

     Washington Business Journal - November 10, 2006
     by Ben Hammer
     Staff Reporter


The Federal Communications Commission has shut the door on Nextel co-founder Morgan O'Brien's request to set aside a portion of the country's airwaves for a public safety network to be managed by his new company.

O'Brien is co-founder and chairman of McLean-based Cyren Call Communications, which had asked the FCC for airwave rights that a proposed public-private initiative could use to build a communications network for public safety officials.

The company would collect fees from industry partners who would pay for the ability to provide services over the network for government agencies.

The airwaves that Cyren Call wants reserved for the network are scheduled to be auctioned for commercial use by Jan. 28, 2008.

The FCC asked for public comment on Cyren Call's proposal Oct. 30 and then dismissed it in a Nov. 3 ruling, saying the request was "inconsistent" with existing law.

The decision now puts the spotlight on the next stage in Cyren Call's strategy: Persuade Congress to pass legislation that would clear the way for FCC approval of its proposal. The company says Congress needs to act by next fall to leave enough time for the FCC to act on the proposal before the scheduled auction.

Cyren Call did get one concession from the FCC. The agency let the public comment period continue through Nov. 29.

"Our focus has been to get a record created at the commission that we could share with our friends in Congress," says co-founder John Melcher, Cyren Call's executive vice president for external affairs. "It helps to have that when you hit the Hill."

Cyren Call is supporting its campaign with a $4 million war chest secured earlier this year from Columbia Capital of D.C., New Enterprise Associates of Baltimore and Silicon Valley firms Battery Ventures and Oak Investment Partners.

The company has won the endorsement of some public safety groups for certain aspects of its proposal, but many people in the communications field and other industries oppose the plan.

"We strongly believe that the spectrum should be auctioned," says Chris Guttman-McCabe, vice president of regulatory affairs for CTIA-The Wireless Association, which represents 300 wireless carriers, device manufacturers and equipment companies. "It makes sense from a competitive perspective."

His group also opposes a separate proposal by D.C. startup M2Z Networks, which wants the FCC to issue it a license for spectrum that would typically be auctioned off.

M2Z would use the license to build a national broadband network that would provide free low-speed service and sell high-speed service. The company would pay 5 percent of the revenue to the U.S. treasury. It has raised $10 million from investors who have committed up to $400 million to build the network.

M2Z co-founder and CEO John Muleta says the Cyren Call ruling has no impact on M2Z. He says M2Z's plans are entirely different, in part because the company is seeking access to different sets of airwaves.

M2Z faces significant challenges in advancing its plan, says lawyer Shirley Fujimoto of McDermott, Will & Emery, who heads the D.C. office's telecommunications practice and is following both M2Z and Cyren Call for clients.

"The FCC in recent history has preferred to have spectrum allocated in public auctions," she says. "This flies in the face of that."

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