WASHINGTON-The Federal Communications Commission is investigating possible wireless resale violations by Nextel Communications Inc., a probe that contributed to the agency rejecting the forbearance petition filed by the Personal Communications Industry Association.
The investigation, which is examining Nextel’s claim that technical problems related to its analog-to-digital buildout and capacity constraints prevent it from offering resale, came to light in the text of the commission’s recent decision not to repeal mandatory wireless resale.
The agency, however, affirmed in a separate ruling its policy to sunset mandatory wireless resale in five years.
“We are confident that when the FCC has an opportunity to review all the facts they will find that Nextel is in full compliance with its resale policy,” said Ben Banta, vice president of corporate communications at Nextel.
Nextel, based in McLean, Va., controls more than half of the specialized mobile radio industry and is one of the largest commercial wireless carriers in the United States.
Despite the mandatory resale law, Nextel, in a Jan. 15 letter to an attorney for Michigan reseller One Source Communications Inc., said it has no resale agreements with any third parties and that FCC rules “do not … impose an affirmative obligation on CMRS [commercial mobile radio service] providers, such as Nextel, to create resale programs by building additional capacity or expending unreasonable amounts of capital solely to make resale capacity.”
Other resellers around the country are said to have received similar letters from Nextel.
One Source accused Nextel of violating resale rules in a petition to deny Nextel specialized mobile radio license applications for Arizona, Florida, Michigan, Virginia and West Virginia.
The FCC last month rejected One Source’s challenge, saying the reseller lacked standing because it didn’t bid in the SMR auction.
FCC officials, for their part, tried to downplay the investigation.
“We have no basis to draw any conclusions about anything,” said Rosalind Allen, deputy chief of the Wireless Telecommunications Bureau.
In a footnote accompanying its vow “to vigorously investigate any complaints that we receive and take appropriate enforcement action,” the FCC’s forbearance ruling references a May 29 letter from Gary P. Schonman, chief of the compliance and litigation branch at the Wireless Telecommunications Bureau, to Nextel Vice President Robert Foosaner on the launch of the resale investigation.
Allen said it was a mistake to have included the footnote in the forbearance decision because FCC investigations are private. When asked whether the footnote was mistake, WTB Chief Dan Phythyon would only confirm that an investigation is ongoing.
“While we don’t know whether it [Nextel resale policy] violates the letter of the law, it certainly violates the spirit of the law,” said David Gusky, vice president of the Telecommunications Resellers Association.
There are strong indications the timing and substance of the Nextel resale controversy hurt the wireless industry’s efforts to overturn mandatory resale. The forbearance ruling carries significant weight because as the first such wireless ruling of its kind, it sets a precedent for future decisions.
The Nextel resale flap picked up steam early in the year and continued through this summer, when the FCC denied One Source’s and PCIA’s petitions.
Indeed, the FCC pointed specifically to the Nextel resale probe to support its decision not to repeal mandatory resale.
“We will not second guess the FCC’s reasons for its [forbearance] decision, however flawed that decision may be. That is a question better asked directly to the FCC,” said Jay Kitchen, president of PCIA.
