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NEWS RELEASE

Committee on Energy and Commerce
Rep. John D. Dingell, Chairman


For Immediate Release: April 16, 2008
Contact: Jodi Seth or Alex Haurek, 202-225-5735

 

Dingell Examines Consulting Firm’s Role in Public Safety Spectrum Auction

Asks for Paperwork on Loans, Venture Capital

Washington, D.C. – Rep. John D. Dingell (D-MI), the Chairman of the Committee on Energy and Commerce, at a hearing yesterday, questioned the financial arrangement between a wireless industry consultant and the non-profit organization that is charged with managing a block of communications spectrum assigned to the public safety community, as well as helping negotiate and manage the creation of a nationwide public safety broadband interoperable network.

During a Telecommunications and the Internet Subcommittee hearing regarding the Federal Communications Commission (FCC) and the 700 MHz auction, Dingell asked Morgan O’ Brien, Chairman of the company Cyren Call Communications (Cyren Call), and Harlin McEwen, Chairman and CEO of the Public Safety Spectrum Trust (PSST), about the relationship between the two entities.

“Every dollar spent on paying advisors to the Public Safety Spectrum Trust is a dollar that could be spent reducing the cost to public safety for using its broadband network,” Dingell said. “There are many interesting facets to this relationship, and I look forward to learning more about the agreement between the PSST and Cyren Call and determining whether this arrangement serves the public interest.”

The PSST is responsible for managing a block of spectrum assigned to public safety. The FCC also charged the non-profit group with negotiating with the winner of an additional block of spectrum, known as the D Block, which was set aside for the creation of a nationwide interoperable public safety broadband network. In October of 2007, the PSST selected Cyren Call as its official advisor. During questioning at the hearing, Dingell asked about the role that the for-profit consultancy Cyren Call is serving.

“Frankly, this entire arrangement puzzles me,” Dingell said.

Dingell questioned O’Brien about reports that Cyren Call and the PSST informed potential bidders on the D Block that the winner of the spectrum would need to pay approximately $50 million annually in spectrum lease fees to the PSST, which may have deterred some entities from bidding on the spectrum. Dingell also raised questions about the propriety of a private firm playing such a crucial role in the management of the public safety spectrum and Cyren Call’s role in loaning money to the PSST, when that money was supplied to Cyren Call by venture capital firms.

“In the FCC Order establishing the public safety licensee, the Commission clearly stated that ‘no commercial interest may be held in the license, and … no commercial interest may participate in the management of the licensee,’” Dingell said.

“Mr. O’Brien, if the PSST is getting its money from you, and you are getting your money from venture capital funds, how does that arrangement not violate the FCC’s order?” Dingell asked.

Dingell concluded by requesting that Cyren Call and the PSST provide the Committee with copies of their agreements with venture capital firms and with each other, as well as a detailed breakdown of how the annual $50 million spectrum license fee would be allocated.

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