Under a rulemaking proposal outlined by FCC Chairman Kevin Martin last Friday, the FCC would re-auction the 700 MHz D-block as a single national license or as 58 separate and interoperable regional licenses. The final licensing scheme will depend on whether a bidder comes forward during the auction to commit the reserve price for the nationwide license. In remarks to reporters, Martin confirmed that a draft further rulemaking notice in the 700 MHz D-block proceeding is now being circulated among the FCC’s commissioners and is scheduled for a vote at the agency’s open meeting on September 25. In keeping with the FCC’s goal of adopting final rules by the end of this year, Martin said an expedited pleading cycle would be established in which comments on the proposal would be due within 14 days of publication. If the FCC succeeds in adhering to that schedule, a D-block reauction could commence between April and June of 2009. Earlier this year, the D-block license—which had been earmarked for a nationwide wireless broadband network to be shared by commercial and public safety users—was the only major spectrum block to go unsold at the 700 MHz auction that netted a record $19 billion in bids. Sources say that the FCC’s latest proposal attempts to address shortcomings in previous auction rules that discouraged prospective bidders, such as an excessive reserve price and overly strict build out requirements. The draft rulemaking notice also responds to public safety entities that have urged the FCC in recent weeks to consider a regional licensing approach for the D-block. Specifically, the FCC would conduct a single auction that includes a nationwide license and two sets of regional licenses—one based on the WiMax standard, the other based on the Long Term Evolution (LTE) interface. (The nationwide licensee may select either standard.) The reserve price for the nationwide license would be slashed from $1.3 billion to $750 million. Minimum opening bids for the regional licenses would be determined according to the size of the market. Acknowledging that the FCC’s preference is to sell the D-block as a single nationwide license, Martin said the agency would give priority to any bidder who commits the established reserve price for that license. However, if the nationwide reserve price is not met, the FCC would award licenses on a regional basis, provided that at least half of the available regional licenses satisfy minimum bid criteria. Among other things, the draft notice would extend the construction period from ten years to fifteen and require winning bidders to build out 90% of their licensed spectrum in rural areas, 94% in mediumsized markets, and 98% in urban areas. The notice would also cap annual spectrum lease fees paid by the commercial nationwide license to a maximum of $5 million.