New York attorney general Eliot Spitzer sent a letter to Federal Communications Commission Chairman Michael Powell expressing concern that the pending Consensus Plan in front of the commission that calls for a rebanding of spectrum in the 800 MHz spectrum band in an attempt to reduce interference for public-safety agencies would unfairly benefit the plan’s backer Nextel Communications Inc. at the cost of billions of dollars to taxpayers.
Spitzer cited claims made previously by Verizon Wireless that the spectrum Nextel would receive in the 1.9 GHz in exchange for giving up some of its 800 MHz spectrum holdings as part of the Consensus Plan could garner at least $5 billion in an open auction. In addition, Spitzer expressed concern that the Consensus Plan’s proposal that Nextel would provide $850 million to help public-safety agencies retune their equipment as part of the realignment would not be sufficient.
“While Nextel clearly should be compensated for its net loss of spectrum, as well as for its commitment to assume the costs of public-safety’s equipment, it should not receive a windfall from the American taxpayers in exchange for its cooperation,” Spitzer wrote in the letter. “Nextel must be required to compensate the U.S. Treasury for the spectrum it receives in the amount that would have been received at an auction of that spectrum. That payment, of course, would be offset by the value of the spectrum the company would give up in the 800 MHz band, as well as by the amount it spends on the costs of public safety’s equipment.”
Published reports have indicated that a majority of FCC commissioners are leaning in favor of approving the Consensus Plan, though they are expected to require Nextel to chip in as much as $3 billion to cover additional rebanding costs and are currently looking at whether to provide Nextel with spectrum in the 1.9 GHz or 2.1 GHz spectrum bands in return for its 800 MHz spectrum. Nextel sent a letter to the FCC last week noting it was not interested in the 2.1 GHz spectrum that was part of the original Consensus Plan filed in late 2001, and the current proposal only factors in the inclusion of spectrum in the 1.9 GHz band.
