WASHINGTON-Nextel Communications Inc. Monday told the Federal Communications Commission it would deposit $100 million in an escrow account and secure irrevocable lines of credit for the other $750 million to pay for the relocation of public safety and private wireless if the Consensus Plan to solve the public-safety interference problem in the 800 MHz band is adopted.
“Nextel’s decision to place $100 million in an escrow fund and arrange for $750 million of irrevocable letters of credit for the benefit of 800 MHz incumbent licensees demonstrates our commitment to ensuring that funding of the relocation expenses under the Consensus Plan is secured,” said Paul Saleh, Nextel chief financial officer.
The Consensus Plan would shuffle the 800 MHz band to eliminate the current situation where public safety, private wireless, Nextel and some cellular carriers are interwoven. Nextel said that $850 million will be sufficient to pay for the necessary retuning of public-safety and private-wireless radios. Others have expressed skepticism that amount will be sufficient.
Previously, Nextel had agreed to place $25 million in escrow with the remainder to be dispersed according to a complicated process outlined in the Consensus Plan.
In exchange for giving up spectrum in the 700, 800 and 900 MHz bands and for paying to retune public safety and private wireless, Nextel has asked for 10 megahertz in the 1.9 GHz band.
RCR Wireless News first reported Oct. 27 that FCC staff is contemplating a proposal that would give Nextel no more than 6 megahertz of spectrum in the 1.9 GHz band.
Nextel’s filing appears to be its offer in what have become public negotiations.
Nextel has also been meeting with various FCC officials in recent days to stress again its view that the Consensus Plan is the only option to solve the interference problem.
Brian Fontes, vice president of federal affairs for Cingular Wireless L.L.C. and an outspoken opponent of the Consensus Plan, said increasing the amount in escrow does not answer the criticisms some public-safety agencies have levied that Nextel will not pay for all of the costs necessary in rearranging the 800 MHz band. “It seems to me that Nextel wants a fantastic deal benefiting only Nextel,” said Fontes.
