WASHINGTON-Down payments for newly won 800 MHz specialized mobile radio licenses are due at Pittsburgh’s Mellon Bank tomorrow. Nextel Communications Inc. said it plans to be there, cash in hand.
“We made a sizable upfront payment, so this shouldn’t be any problem,” commented Robert Foosaner, Nextel’s vice president and chief regulatory officer. His company, the overall winner of the Federal Communications Commission’s latest auction that ended Dec. 8, is satisfied with the $88.8 million it spent on 475 licenses, and Foosaner does not believe Nextel overpaid.
“We felt what we paid for was good value,” he said. “We like the idea of geographic areas so that we can move from high-power sites to low-power sites. We did not overpay.”
In fact, Foosaner disputes the idea that the SMR auction was “the Nextel auction,” pointing to the company’s almost $100 million bill. “People who said this was a Nextel auction were wrong. This auction lasted 235 rounds. Someone was bidding against us,” he explained.
Up until 1994, Nextel was against auctioning private spectrum, telling the FCC that geographic areas should be licensed to the incumbents, and that auctions only would spawn a cottage industry of applications mills, charging up to $7,000 to prepare FCC paperwork. When Congress authorized auctions in 1993, the commission began the process of allocation by bidding, and private expansion frequencies had been frozen. “In 1994, we still did not support an auction, but to get out of the regulatory morass and the freeze, we fell in behind them,” Foosaner said.
Citing continuing collusion regulations, in place until Dec. 23, Foosaner could not comment much on the FCC’s introduction of click-box bidding, saying only that “it made the thought process simpler.” Nextel plans to provide comments to the FCC on this at a future date. Regarding minimum bids, Foosaner said, “They posed no problem for us,” and that his company will comment on those as well.
Once it is granted its licenses sometime in 1998, Nextel plans to begin the task of relocating current operators to comparable spectrum. The ESMR operator has 90 days to notify all affected carriers, which then begins the clock ticking for the one-year voluntary negotiation period. If deals cannot be concluded within that year, a second, mandatory negotiation year is added.
“We want this to be as positive as possible,” Foosaner said. “We hope to come to positive resolution with most.”
Like other wireless carriers, Nextel has had its problems with siting, although it has deployed some 2,000 new antennas in the past year. Putting nearly 500 new licenses into action could be a nightmare, but “we believe that in our dealings with incumbent SMRs, this will be a limited problem,” Foosaner said.
As far as third-quarter 1998 auctions of the lower 800 MHz bands go, Foosaner said Nextel “will participate,” although it is “a very ambitious schedule. The spectrum is much more congested in the lower bands, and the way they were licensed is different than how the upper bands were licensed.”
