Verizon Wireless pledges minimum $5 billion for 1.9 GHz spectrum Nextel covets

Verizon Wireless yesterday said it was prepared to open bidding at $5 billion for the 10 MHz of spectrum in the 1.9 GHz band that Nextel Communications presumably would receive should the FCC approve the so-called Consensus Plan.

The plan, first proposed by Nextel and supported by major public-safety organizations including the Association of Public-Safety Communications Officials, proposes to solve the interference that plagues the 800-MHz band by rebanding the spectrum in that band. The interference that has disrupted public-safety communications nationwide is being caused by Nextel’s interleaved spectrum; after the rebanding, Nextel and public-safety licensees each would hold contiguous blocks within the 800-MHz band.

Nextel has pledged $850 million to pay for the relocation of public-safety and private wireless licensees within the band. It has asked for the 10 MHz of spectrum at 1.9 GHz as part of the deal. But Verizon Wireless, in a letter to FCC Wireless Telecommunications Bureau Chief John Muleta yesterday, said the awarding of the spectrum outside an auction procedure would violate the commission’s rules and federal law and would be contrary to U.S. spectrum policy over the past decade.

“The only proper action for the 1.9 GHz spectrum is to auction it to the highest bidder,” said Molly Feldman, vice president-business development for Verizon Wireless, said in the letter. Feldman also said Verizon Wireless otherwise supports a rebanding of the 800-MHz spectrum.

Nextel spokeswoman Leigh Horner declined to comment on the letter, but said Nextel believes the FCC would be well within its rights to award the spectrum without an auction. “The FCC has the authority to modify existing licenses. This is not a new spectrum license that they would be granting,” Horner said.

Yesterday, the Washington Post reported that a majority of FCC commissioners already had voted to approve the Consensus Plan but would require Nextel to pay between $1.3 billion to $1.5 billion more than the $850 million it had pledged in order to receive the 1.9 GHz spectrum. It was anticipated that the item would be addressed during the FCC’s regularly scheduled monthly meeting next week, but an agenda released yesterday showed no indication that would occur.

Rudy Baca, wireless strategist for Precursor, predicted late last week that the decision would be released by April 15, the date of the FCC’s meeting but has since changed his mind.

“I don’t think it’s going to happen [next] week,” Baca said.

Specifically, the commissioners are debating whether Nextel should write a check for the assigned value of the 1.9 GHz spectrum or be extended a credit that could be applied to future auctions—including an auction for the 1.9 GHz spectrum should the FCC reverse its expected course and put the block up for bid. Commissioner Kathleen Abernathy has expressed a desire for the latter approach, according to Baca.

With reporting by Donny Jackson in Milwaukee.