Rebanding negotiations between 800 MHz NPSPAC licensees and Sprint Nextel have been difficult, but actually executing the work associated with the reconfiguration process could be tougher, according to the Transition Administrator (TA) quarterly report released last week.

Reiterating a theme that has existed during the past year, the TA report indicated that clearing licensees from the Channel 1-120 frequencies is progressing well—87% have rebanding agreements and 77% have moved to new spectrum—but the same cannot be said about NPSPAC licensees.

Rebanding NPSPAC licensees is proving to be “much more complex and time-consuming than was anticipated,” according to the quarterly report. Indeed, despite several schedule extensions, no NPSPAC licensee has been relocated, as the vast majority is in mandatory mediation. For instance, only 45% of Wave 1 licensees—representing just 18% of the call signs in the wave—had submitted a rebanding agreement to the TA as March 31.

And the numbers for subsequent NPSPAC waves are much worse, as only 13.6% of Wave 2 and Wave 3 NPSPAC licensees had submitted rebanding deals to the TA as of March 31. Resource issues and concerns over cost standards—something the FCC attempted to address with a May ruling that provided some flexibility on the matter—were primary reasons cited by the TA for the slow negotiations.

However, there are encouraging signs on the NPSPAC front, TA Director Brett Haan said during an interview with MRT. The state of Colorado has completed a rebanding agreement with Sprint Nextel, and the Utah Communications Agency Network (UCAN)—a system of similar size and complexity to the Colorado network—is “quite close” to a deal, Haan said.

As difficult as NPSPAC negotiations have been, “the TA expects that implementation will be equally, if not more, challenging and complex,” the quarterly report states. Scheduling NPSPAC licensees to move to new frequencies is one concern cited in the report—one that Sprint Nextel and public-safety leadership have asked the FCC to let the TA address.

“While it is too early to draw definitive conclusions as to specific implementation benchmarks for NPSPAC reconfiguration, the TA currently believes, based on progress made to date, that parties can and must complete a number of NPSPAC licensee reconfigurations in 2007, including several systems that should serve to validate the functionality of key software developed for the rebanding process,” the report states.

In terms of costs, the report notes that Sprint Nextel had paid $704.8 million associated with rebanding at 800 MHz and 1.9 GHz, with $40.8 million being paid to non-Sprint Nextel licensees. The TA has received $75 million to date, with another $11 million in projected expenditures during the quarter ending on June 30.

Under the FCC’s rebanding order, Sprint Nextel is required to pay all costs associated with 800 MHz reconfiguration or $2.8 billion—whichever proves to be greater—that is guaranteed by a $2.5 billion line of credit. While there has been recent speculation that the cost of rebanding will exceed the $2.8 billion threshold, the TA report states no financial concerns from this perspective.

“There is no indication at this time that the $2.5 billion balance in the letters of credit is insufficient to cover the costs of reconfiguration or that the balance in the letters of credit should be increased,” the report states.