Speaking at a civic group luncheon in Silicon Valley last week, FCC chairman Kevin Martin gave his clearest indication yet of how he thinks the upcoming auction of 700-MHz spectrum for wireless broadband services should be structured.

"One of the things that I think we need to do is [to consider] the potential to have some synergies between the two, some public-private partnerships that would allow for cross-utilization of the spectrum," Martin said, according to Reuters. "Public safety [agencies are] coming to us to say they don't have the resources to build out a next-generation [wireless] network. The question is one of how to work with the private sector."

Martin then described an auction in which two-thirds of the 60 MHz of available bandwidth would be reserved for smaller local players, and the remaining 20 MHz would be offered to larger players to create an entity that "can compete effectively with established phone and cable carriers."

That sounds an awful lot like the proposal put forth by Frontline Wireless, a startup headed by a trio of veteran telecom executives including Reed Hundt, himself the former FCC chairman. Backed by prominent Silicon Valley investors including Netscape founder Jim Barksdale and John Doerr of venture capital firm Kleiner Perkins Caufield and Byers, Frontline is proposing the building of a nationwide broadband network that would be available for public safety use during emergencies and leased to commercial carriers at other times. To ensure that it can successfully compete against the major wireless carriers AT&T (formerly Cingular) and Verizon Wireless, Hundt's group has asked that a portion of the valuable spectrum be set aside in the auction for smaller players.

"I think that the chairman is characteristically smart -- he understands that Frontline is trying to capture two birds with one net," Hundt said in an interview this morning. "The first is to find a way to build a national network for public safety, and the second is a market-based way of guaranteeing comptition.

"He's got it. However, he doesn't have three votes [on the five-member commission]. I simply think it's a jump ball over at the FCC. And whenever you've got a jump ball, the odds are in favor of the heavyweights, i.e., AT&T and Verizon."

Pointing out that in last year's auction of spectrum for advanced wireless services (known as the "AWS" auction), 96% of the available bandwidth was snapped up by the major carriers, Hundt contends that the 700-MHz auction, which will sell off spectrum currently held by TV broadcasters and scheduled to be relinquished as they move to digital TV, is the last chance to create a nationwide public-safety network and to provide U.S. residents with true wireless broadband.

"Wireless broadband was supposed to offer an alternative, a so-called third pipe," Hundt states. "How's that going to happen if the whole industry is divided between two guys that already [offer] DSL?"

In fact, Frontline is demanding that whoever wins the spectrum at auction -- considered prime real estate for high-speed wireless networks -- be required to actually build out a network rather than stockpile it, which is what the Frontline executives contend the major carriers would do.

The big carriers counter that Frontline is essentially asking the federal government to subsidize its attempt to build a national wireless network.

At this point, the FCC is due to publish the rules for the auction by about July 1, meaning that the auction itself would start around Oct. 1 and run for several months. The Frontline proposal seems to have the backing of the FCC's most important member; whether it can garner two more votes remains to be seen.