WASHINGTON-Tim Donahue, chief executive officer of Nextel Communications Inc., said Thursday morning Nextel finds nothing in the Federal Communications Commission’s plan to solve public-safety 800 MHz interference that it opposes and believes that the issues it has been discussing with the FCC can be handled through an “erratum.”
“There isn’t anything inside that order that we are necessarily opposed to. What we want is more granularity and more clarity around two or three of the issues, so it is a clarification process that we are going through right now,” said Donahue.
Donahue spoke to reporters following the FCC’s Network Reliability and Interoperability Council meeting. He is NRIC chairman.
“I am very confident that the FCC understands that it is a bit fuzzy and they are now revisiting issues and they will be coming back to us with the clarification that we have asked for so we will see how the issues roll themselves out,” said Donahue. “I am very comfortable that we are getting to a point where we can be satisfied and the FCC can be satisfied and we can move forward,” he said.
“It is our hope and expectation that the issues can be resolved through an erratum. The people who are in the know have advised me that an erratum will work. We will see if the FCC will have the same reading of that as we do, but it is our view that an erratum can resolve them,” said Donahue. “In terms of where I am at when I look at the situation, is we think an erratum makes sense. We haven’t given a whole lot of thought to a petition for reconsideration because we do think and a whole lot of experts have advised us that is the way it will go. If that is not the way, we will have to see where to take it. I do have a high degree of confidence that this can be done by the erratum process.”
By deploying an erratum strategy, Nextel is hoping that the FCC will make changes without seeking public comment.
“With something that is this complex, it is just not unusual for there to be some fine-tuning, and the FCC has a number of tools at its disposal for this purpose,” said Lauren Patrich, special counsel for media relations for the FCC’s Wireless Telecommunications Bureau.
Earlier in the week, Nextel said it wanted to reduce the amount of money it would owe to the treasury as part of the FCC’s plan to solve public-safety interference in the 800 MHz band.
In a filing regarding meetings Donahue and others had with members of the FCC and staff, Nextel asked that its spectrum valuation be used instead of the FCC’s valuation.
“Applying the FCC’s valuation formula using Nextel’s current more granular spectrum totals and accurate population coverage yields an 800 MHz spectrum value credit of $2.059 billion-an increase of $452 million over the $1.607 billion credit set forth in the FCC’s rules,” said Nextel.
Nextel is to pay money into the treasury if the value of the spectrum it returns and relocation expenses do not equal $4.86 billion-the value the FCC put on the G-block. The G-block is the highly contested spectrum in the 1.9 GHz band that Nextel would receive as part of the rebanding plan.
Verizon Wireless Sept. 15 warned Nextel would try to reduce its potential payment and charged that Nextel and the FCC were talking illegally, based on an investor note released Sept. 9 by Legg Mason.
Tim O’Regan, Nextel manager of public affairs, denied that Nextel has talked to the FCC in detail prior to last week about the valuation of the spectrum it would be relinquishing.
“We have been having generalized conversations,” O’Regan told RCR Wireless News.
Nextel has also asked it be given credit for “the costs it incurs in adding the base stations necessary to maintain its existing network capacity during the band reconfiguration transition process.”
Geoff Stearn, vice president of spectrum resources, said Nextel has always believed it would be given credit for deploying and maintaining cell sites that it must build to add capacity as it reduces spectrum resources as part of the rebanding.
Lawrence Krevor, Nextel vice president of government affairs, said Nextel cannot use temporary facilities to maintain capacity. “COWs are far less efficient. You are talking about the whole country.” COWs refers to cell on wheels-a common temporary facility.
Nextel also asked to use a different credit mechanism than envisioned by the FCC in its rules.
The FCC wanted Nextel to sign a $2.5 billion irrevocable letter of credit; Nextel previously agreed to an $850 million irrevocable letter of credit. Nextel said it would prefer `stand by’ rather than `debit card’ letter of credit. Krevor said it would be cheaper for Nextel to simply pay bills as they become due rather than have the Transition Administrator withdraw from the secure line of credit.
“What we had intended was a stand-by letter of credit. Nextel would pay out of its resources. The letter of credit is a stand by,” said Krevor. “Either way the FCC will have the same assurance. The FCC will have the same amount of money to make sure that realignment gets done.”
The FCC in July adopted a plan to solve the interference problem, swap some spectrum with Nextel and have Nextel pay to move other companies off the spectrum band Nextel would receive. The FCC released the text of the plan-256 pages-in early August. It has yet to be published in the Federal Register. Nextel has 30 days from publication in the Federal Register to say whether it will agree to the plan.
Once Nextel makes its decision to accept the plan, as strongly hinted by Donahue, the plan is expected to be appealed by either Verizon Wireless or an economic area 800 MHz licensee adversely impacted by the plan.
