June 17 (Bloomberg) -- AT&T Inc. and Verizon Wireless, the two biggest U.S. mobile-phone carriers, have joined a grassroots alliance of police and firefighters to oppose a government plan that could award disputed airwaves to smaller competitors.
The phone companies want Congress to give the airwaves to public-safety agencies for communications instead. That would derail a Federal Communications Commission plan for an auction and keep the spectrum out of the hands of potential bidders such as Sprint Nextel Corp. and Deutsche Telekom AG’s T-Mobile.
“This is all about AT&T and Verizon trying to keep their spectrum advantage,” Harold Feld, legal director of Public Knowledge, a Washington-based advocacy group, said in an interview.
AT&T and Verizon were the biggest winners in a 2008 airwaves auction. The FCC may bar the two companies from bidding in the name of providing consumers more choices, Feld said. A new auction would raise as much as $4 billion, according to testimony at a congressional hearing today.
The dispute is also about how to improve emergency communications, a debate underway since the 2001 terrorist attacks. Police and firefighters responding in New York couldn’t get messages through and sometimes couldn’t talk with each other because their radios were on different frequencies.
AT&T and Verizon say the answer is for Congress to give public-safety agencies a swath of airwaves known as the D-block for a unified and expanded communications network. They made their case today at the hearing of the House Subcommittee on Communications, Telecommunications and the Internet.
“We’re saying what public safety says -- this has been a mess for far too long,” said Jeffrey Nelson, a spokesman for Basking Ridge, New Jersey-based Verizon Wireless.
The FCC is seeking to auction off the D-block to telecommunications companies, with proceeds going toward the $6.5 billion cost of equipment, such as transmitters and towers, for a new public-safety network. An auction may fetch $3 billion to $4 billion, according to testimony submitted by Coleman Bazelon, a Washington-based economist with the Brattle Group.
The FCC says police and firefighters can use spectrum already assigned to them day-to-day and claim priority use of the D-block in an emergency.
Borrowing commercial airwaves is unrealistic, said Rob Davis, the chief of police in San Jose, California, and president of the Major Cities Chiefs Association.
Even in minor earthquakes in California, “everybody scrambles to their cell phones to call Grandma, and our cell systems go down,” Davis said in an interview. “The right way is to grant that spectrum to public safety.”
The Public Safety Alliance, a partnership of groups representing police, fire and emergency medical coworkers, is opposing the FCC’s approach in a $500,000 campaign using the Internet, news releases and advertisements in Washington newspapers, spokeswoman Courtney McCarron said.
Representative Henry Waxman, a California Democrat and chairman of the Energy and Commerce Committee, said a draft bill calls for auctions and public funding to build a network. He acknowledged that public-safety officials aren’t happy with that approach, and said their focus on D-block undercuts progress toward a nationwide network.
“This singular focus on the D-block undercuts what we all want to achieve: a sustainable nationwide broadband network for public safety,” he said. “Spectrum without a viable plan to utilize it efficiently will create a network of haves and have nots.”
Representative Cliff Stearns of Florida, top Republican on the House panel, said he wants Congress to prohibit the FCC taking actions that may harm proceeds from an auction.
“Absent explicit prohibitions in the legislation, we have no assurances the FCC won’t impose harmful conditions on the D-block auction, harming spectrum policy and reducing proceeds we need to fund the public-safety network,” he said.
The Public Safety Alliance benefits from indirect financial support by Dallas-based AT&T; Verizon Wireless, owned by Verizon Communications Inc. and Vodafone Group PLC; and equipment makers Motorola Inc., Alcatel-Lucent SA and Harris Corp.
Those companies help underwrite the Daytona Beach, Florida-based Association of Public-Safety Communications Officials - International, or APCO, which in turn runs the partnership and has McCarron as its spokeswoman.
“They have been supporters of our position,” said McCarron, who is based in Alexandria, Virginia.
Nelson of Verizon Wireless and AT&T’s Washington-based spokeswoman Margaret Boles said the companies support APCO without contributing directly to the campaign against the FCC plan.
Mobile-phone companies are fighting for airwaves to satisfy rising demand for Web services, Jeffrey Silva, a Washington-based analyst for Medley Global Advisors LLC, said in an interview. AT&T faces network congestion as the popularity of smartphones such as Apple Inc.’s iPhone tax its system.
T-Mobile supports the FCC’s plan, Tom Sugrue, vice president for government affairs at T-Mobile USA, said in an e-mailed statement. Sprint, based in Overland Park, Kansas, may bid on the airwaves if they are offered, Larry Krevor, a vice president for spectrum, said in an interview.
A decision should be made soon because public-safety equipment could be hoisted onto towers as carriers deploy new technology called 4G, James Barnett Jr., chief of the FCC bureau of public safety and homeland security, said in an interview.
“This is the time that we have to do it,” Barnett said. “If we miss the 4G buildup, the price goes up and I think we miss the chance.”
To contact the reporter on this story: Todd Shields in Washington at email@example.com
To contact the editor responsible for this story: Larry Liebert at firstname.lastname@example.org.