WASHINGTON-Nextel Communications Inc. was dealt a major blow last week by the Federal Communications Commission, which told the nation’s top dispatch operator it cannot use private wireless spectrum to build out its nationwide network.
“This portion of Nextel’s [waiver] request would require a fundamental change in commission policy for the 800 MHz band and is better addressed by a rule making than by a series of waivers,” said Thomas Sugrue, chief of the FCC’s Wireless Telecommunications Bureau.
The WTB, however, said it will let Nextel use industrial-land transportation channels in order to help relocate incumbents on the upper 200 channels at 800 MHz-a fallout of the transition from single-antenna licensing to geographic licensing.
The bureau also is soliciting public comment (Aug. 2; Sept. 16 for replies) on the question of whether commercial mobile radio service providers should be allowed to use private spectrum as a matter of future policy. Comments will be rolled into an open proceeding on implementing a 1997 law that expanded the FCC’s spectrum auction authority.
“It’s pretty encouraging to see the FCC do the right thing. And it looks like they did that,” said Laura Smith, executive director of government relations for the Industrial Telecommunications Association.
Last Wednesday’s ruling, which followed recent complaints about FCC favoritism toward Nextel, comes just weeks after the Justice Department and Nextel struck a deal largely eradicating Nextel’s $150 million purchase of Geotek Communications Inc.
Nextel bought Geotek’s 191 900 MHz specialized mobile radio licenses at a bankruptcy auction last December.
Some SMRs are highly critical of the proposed Nextel-DOJ settlement because they say it could enable Nextel to buy a good chunk of non-Geotek 900 MHz channels immediately and later return to gobble up Geotek’s licenses next October, when the five-year-shortened consent decree sunsets.
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The proposed antitrust settlement is pending before U.S. District Thomas F. Hogan.
Comments on the Nextel-DOJ deal should be filed with the court early this week.
Nextel, which towers over the dispatch industry and competes favorably with mobile phone firms for corporate accounts, needs more spectrum to accommodate fast-paced subscriber growth and coming multimedia applications that require bandwidths wider than it has today.
Without more frequencies, Nextel’s ability to compete with other national wireless carriers-like AT&T Corp. and Sprint Corp.-could be hampered.
But for now, Wall Street likes Nextel’s dominant niche and is comforted by the strong monetary and increased management backing of telecom billionaire Craig McCaw.
“It’s an interesting compromise,” said Alan Shark, president of the American Mobile Telecommunications Association, which represents Nextel and other SMRs.
Shark added, “It takes away a lot of fears that a lot of people had about starting a stampede.” He said he wants to ensure other AMTA members are afforded relief similar to that granted by the FCC to Nextel.