WASHINGTON-FCC Chairman Michael Powell hinted to reporters Thursday that Nextel Communications Inc. may yet be willing to accept spectrum in the 2.1 GHz band instead of the 1.9 GHz band requested as part of the Consensus Plan to solve public-safety interference in the 800 MHz band.
“People say whatever they want to say in their letters but it doesn’t mean it is the end of the story, and I am not really able to share with you all of the details of where we are. I can only say that we are still pretty confident that we are making progress, and we are going to get there pretty soon,” said Powell.
Powell was apparently referring to a letter he received Tuesday from Timothy Donahue, Nextel chief executive officer and president, rejecting the 2.1 GHz spectrum.
“Nextel’s commitment does not apply, however, if the Federal Communications Commission substitutes 2.1 GHz for the 1.9 GHz G Block replacement spectrum. For all of the reasons discussed above, 2.1 GHz is untenable for Nextel’s shareholders. My responsibility to Nextel’s shareholders requires that Nextel obtain comparable value in any retuning transaction: 2.1 GHz does not meet that test. Nextel cannot and will not accept that result and will avail itself of every possible legal challenge to that outcome,” wrote Donahue.
Powell said he hopes to complete the rules for solving the 800 MHz public-safety problem by the end of the month “but it is difficult because there are valuation issues, but I am going to shoot for that.”
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.
