WASHINGTON-Nextel Communications Inc., and the rest of the wireless world, will have to wait a bit longer.
The Federal Communications Commission late Thursday put out the agenda for its May 13 meeting, and again rules to solve the public-safety interference problem in the 800 MHz band were absent. It is now believed the FCC will release the rules after voting in private. FCC Chairman Michael Powell had told reporters in March to expect it to be considered at the April 15 meeting, but then, as now, it was not on the agenda.
The continuing delay meant that each side had more time to lobby-and they did. Nextel filed a critique of spectrum appraisals filed by Verizon Wireless and Verizon made public a letter from a senator critical of the Consensus Plan, which Nextel supports.
The lobbying followed yet another public rejection by Nextel of an offer of spectrum in the 2.1 GHz band. Instead, Nextel tried to sweeten the Consensus Plan by agreeing to pay to relocate broadcast auxiliary service.
Nextel’s opponents, specifically Verizon Wireless, have complained that if the FCC awards Nextel spectrum in the 1.9 GHz band, it will amount to a spectrum grab. Verizon has relied on estimates by Kane Reece Associates Inc. to tell the FCC that Nextel will gain more than it gives up if the Consensus Plan is adopted.
But the American Appraisal Associates said Kane Reece used faulty assumptions in determining the value of the spectrum that Nextel would receive under the Consensus Plan.
“Given the number of inaccurate financial assumptions and errors of methodology of the Kane Reece analysis, we must reject their valuation conclusions,” said Richard Billovits, American Appraisal vice president and principal.
Nextel has filed a spectrum appraisal from American Appraisal with the FCC.
Sen. Charles Schumer (D-N.Y.), a frequent critic of the wireless industry, urged the FCC not to give Nextel spectrum in the 1.9 GHz band.
“I write to express my concern about the FCC’s reported plans for resolving the 800 MHz interference problem. I know that the commission shares my view that public-safety communication must be protected from interference resulting from the use of telecommunication technology. However, the solution to that problem should not needlessly disperse valuable public spectrum when other alternatives exist,” wrote Schumer. “I am also concerned that the spectrum Nextel is seeking is a very valuable public resource. Particularly in this time of growing deficits and rising costs of homeland defense and fighting the war on terrorism, we cannot afford to give away such valuable public resources.”
Thursday’s filings by Nextel and Schumer occurred three days after Nextel offered to pay the BAS relocation costs. In return, Nextel obtained the support of the National Association of Broadcasters and the Association for Maximum Service Television for the Consensus Plan.
“In return for receiving replacement spectrum at 1.9 GHz, Nextel has agreed to provide relocation compensation for stations and deploy future Nextel service in a way that avoids limiting electronic news-gathering operations. The American public benefits from local stations in all television markets being able to provide a maximum level of remote electronic news gathering,” said NAB, MSTV and Nextel.
The offer by Nextel to pay for BAS relocation is contingent upon receiving spectrum in the 1.9 GHz band and receiving credit for paying for the BAS relocation in any final plan the FCC proposes to solve public-safety interference.
“Nextel would commit to funding the entire cost of relocating all BAS incumbents nationwide from the 1990-2025 MHz band, subject to Nextel’s being assigned replacement spectrum in the 1910-1915-1995 MHz band and receiving full credit for its contribution to the BAS relocation costs,” said Nextel.
There are at least four different options to resolve interference at 800 MHz on the record.
The Consensus Plan would shuffle the 800 MHz band to eliminate the current situation where public safety, private wireless, Nextel, other SMRs and cellular carriers are intermingled. In exchange for giving up spectrum in the 700 MHz, 800 MHz 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. It is supported by Nextel; the Industrial Telecommunications Association, which represents private-wireless interests; and some public-safety advocacy groups. Other public-safety advocacy groups have expressed concern about the Consensus Plan.
The FCC’s staff proposal closely tracks with the Consensus Plan, requiring Nextel to pay perhaps billions more than the $850 million it said it would pay as part of the rebanding agreement. Nextel would pay all of the relocation costs plus the difference between that amount and “fair-market value” of 10 megahertz of spectrum it seeks in the 1.9 GHz band. The staff proposal reportedly does not require Nextel to relinquish its 700 MHz and 900 MHz spectrum.
The Balanced Approach Plan calls for timely resolution of interference at the expense of the interferer, coupled with technical rules, notification and coordination procedures to prevent new interference. It has been pushed by the United Telecom Council, which represents utilities, and until recently, the Cellular Telecommunications & Internet Association.
Late last month CTIA said Nextel should pay $3 billion to cover the rebanding costs of the 800 MHz band, but instead of getting spectrum in the 1.9 GHz band, it should get spectrum in the 2.1 GHz band. Nextel would get the 2.1 GHz spectrum as the retuning in the 800 MHz band is completed. The money would also be deposited in a third-party trust fund with protections against bankruptcy.
