Appeals court gives no hints on Sprint Nextel rebanding ruling

A federal appeals court gave few signals how it will rule on Sprint Nextel Corp.’s challenge to the Federal Communications Commission’s 800 MHz rebanding ruling last year, leaving uncertainty over whether the No. 3 carrier will face sanctions for failing to meet an upcoming deadline as part of a transition process costing it billions of dollars.
Sprint Nextel is giving up its 700 MHz and some 800 MHz channels in exchange for 10 megahertz of spectrum in the 1.9 GHz band. The carrier has until June 26 to move off most of its 800 MHz spectrum and make it available to public-safety agencies. The complicated spectrum shuffle was designed to prevent interference to first-responder radio systems.
“Oral arguments yielded little insight into the court’s leanings on this case. Sprint hopes the court will either stay the September 2007 order or remand it back to the FCC with instructions to provide a longer rebanding horizon,” said Jessica Zufolo, an analyst at Medley Global Advisors L.LC. “In the meantime, Sprint hopes that today’s arguments will put pressure on the FCC to grant them waivers so that they may continue to occupy licenses in the interleaved portion of the band while NPSPAC [National Public Safety Planning Advisory Committee] licensees prepare to relocate.”
Lawyers for the FCC and Sprint Nextel argued the case before the U.S. Court of Appeals for the District of Columbia Circuit on March 18.
Analysts at Stifel, Nicolaus & Co. Inc. also observed that the oral argument was inconclusive, with the three-judge panel largely occupied with jurisdictional and administrative law issues in connection with the Sprint Nextel appeal.
“Because the court took the case on an expedited schedule, we expect it will issue a decision within the next few weeks,” said Stifel, Nicolaus. “Sprint’s warning in its recent 10-K – that if it loses the appeal, costs could exceed $3.4 billion by a ‘material’ amount – reflects, in our view, the worst case and unlikely scenario of the FCC enforcing a flash-cut abandonment of all the 800 MHz spectrum.”
Sprint Nextel said it has made significant progress on 800 MHz rebanding. In an e-mail to RCR Wireless News, the carrier said it recently informed the FCC of the following achievements:
–Overall, 95% of the nearly 1,200 channel 1-120 licensees that must be retuned during Phase I of 800 MHz band reconfiguration have been retuned.
–This month Sprint Nextel and SouthernLINC completed the retuning of all of SouthernLINC’s 1-120 channels to its new channel assignments in the new ESMR-band in the southeastern U.S. Thus, retuning NPSPAC licensees in these five NPSPAC regions will, going forward, only have to coordinate their retunes with Sprint Nextel, making the retuning process more efficient and less complicated for all parties.
–Phase II continues to show strong progress. For example, over 100 public-safety licensees have completed retuning to their new channel assignments and more than 500 of the 900 non-border area public-safety licensees who must be retuned have signed FRAs [frequency reconfiguration agreements] and are at various stages of implementation. Of the approximately 400 licensees who have not yet signed FRAs, 60% of those licensees continue to plan their retunes pursuant to Planning Funding Agreements.
–145 Phase II NPSPAC licensees have established a date certain with Sprint Nextel for starting and completing their physical retuning work.
–Sprint Nextel has been notified of and is prepared to timely provide cleared replacement channels for nearly 500 public-safety agencies.