WASHINGTON-FCC Chairman Michael Powell hinted 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 a plan to solve public-safety interference in the 800 MHz band. But for its part Nextel has been resolute that it wants spectrum at 1.9 MHz.
“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 referring to a letter he received last week from Tim Donahue, Nextel’s 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.”
While Powell hinted that the FCC is trying to convince Nextel to accept the 2.1 GHz spectrum, the Cellular Telecommunications & Internet Association said it is not necessary to go to such lengths, because Nextel does not have veto power over commission actions.
“The FCC is not faced with the choice of accepting Nextel’s proposal or doing nothing at all. The commission always has the power to order the affected parties, including Nextel, to remedy interference in this proceeding, whether or not it grants spectrum as `compensation.’ Nextel’s consent is not needed, nor does it hold a veto power over any remedy the FCC may choose. The commission may clearly order actions to resolve the interference problem by invoking over half-a-century of legal precedent governing the obligations of one licensee not to interfere with other licensees,” said Diane Cornell, CTIA vice president of regulatory policy.
Cornell’s statement was included in a letter sent late Thursday to the FCC. The CTIA letter countered Donahue’s statements by restating that CTIA’s Compromise Plan is the best option.
“This proceeding presents a difficult challenge to the FCC. However, the commission’s role is not to satisfy the ideal business needs of any one party, but rather to solve the public-safety interference problem in the most legally sustainable, equitable and effective way. CTIA’s proposal does just that,” said Cornell.
CTIA also believes its plan is better for public safety because it requires Nextel to complete the re-banding process before receiving replacement spectrum.
“Nextel claims that its plan is `fair to all stakeholders, including the American taxpayer.’ But its plan is not `fair’ to public safety when compared to the CTIA Compromise Plan. It asks for a spectrum grant before it completes any efforts to relocate public safety, the opposite of what is proposed in the CTIA Compromise Plan,” said Cornell.
Nextel shot back late Friday saying that because 70 percent of the licensees in the 2.1 GHz band are cellular carriers, CTIA’s members could significantly slow the availability of that band.
“Verizon Wireless, Cingular Wireless L.L.C. and AT&T Wireless Services Inc. alone hold licenses for approximately 40 percent of the microwave links, and this percentage holds true for each of the three potential 2.1 GHz replacement downlink blocks: 2165-2170 MHz, 2170-2175 MHz and 2175-2180 MHz. Nextel’s competitors now are advocating assigning inferior replacement spectrum to Nextel that would give them the opportunity to directly affect the cost and timing of clearing the 2.1 GHz spectrum band,” said Nextel. “It is beyond comprehension that CTIA and Verizon (the holder of more than 20 percent of incumbent microwave licenses at 2.1 GHz) failed to inform the FCC of these facts. The commission is dependent on the candor and veracity of its licensees in its proceedings, as well as the associations that represent them. Pertinent factual omissions should not and must not be tolerated, particularly in public-safety-related proceedings.”
Late last month, CTIA said Nextel should pay $3 billion to cover the re-banding costs of the 800 MHz band, but instead of getting spectrum in the 1.9 GHz band, it should get spectrum at 2.1 GHz. Nextel would get the 2.1 GHz spectrum as the retuning in the 800 MHz band is completed. The money would be deposited in a third-party trust fund with protections against bankruptcy.
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. Nextel; the Industrial Telecommunications Association, which represents private-wireless interests; and some public-safety advocacy groups support the Consensus Plan. Other public-safety advocacy groups have expressed concern about the Consensus Plan.
At least one analyst still believes Nextel will prevail and get spectrum in the 1.9 GHz band.
“We remain of the opinion that the company’s original plan will still gain regulatory (and judicial) approval,” wrote George Reed-Dellinger of Washington Analysis in an investor note last week. “We remind investors that because the FCC has concluded the 800 MHz block in which the public-safety and SMR carriers operate … should be `re-banded’ there is no other near-term option to improve public safety that wouldn’t take years to effectuate and probably require legislation. If the commission were to nit-pick Nextel over value (which would be unwise given the FCC’s record in the infamous NextWave Telecom Inc. proceeding), then the company could simply walk away from the deal leaving the government in another highly embarrassing position.”
In its letter, CTIA also took umbrage with a claim made by Donahue that cellular carriers are causing at least 25 percent of the interference in the 800 MHz band.
“There is nothing in the record-apart from a completely unsubstantiated statement from Nextel-that supports Nextel’s statement that other carriers are responsible for anything close to 25 percent of the problem. In reality, the record indicates just the opposite: that Nextel is responsible for the vast majority of the problem, and other carriers may be responsible for at most a very small percentage of the interference incidents,” said Cornell.
There are at least four different options to resolving interference at 800 MHz on the record: the Consensus Plan, CTIA’s Compromise Plan, the Balanced Approach Plan and the staff proposal.
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 re-banding agreement. Nextel would pay all of the relocation costs plus the difference between that amount and “fair-market value” of the 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 recentl
y, CTIA. RCR
