800 MHz resolution delayed again
After nearly two years waiting for the Federal Communications Commission to address interference problems at 800 MHz, anxious public-safety officials have been outspoken in their disappointment that the FCC did not issue an order last month as expected.
”It’s frustrating because we need to get a solution,” said Bob Gurss, director of government affairs for the Association of Public-Safety Communications Officials International (APCO). “Every day we delay is another day people are at risk.”
But the matter has become increasingly complex, with Verizon Wireless vowing to bid at least $5 billion for the 1.9 GHz replacement spectrum earmarked for Nextel Communications and reports that the FCC might substitute 2.1 GHz airwaves for the 1.9 GHz frequencies contained in the proposal. Political pressures are significant — Congress wants the revenue a spectrum auction would bring, while the security-conscious Bush administration wants the matter addressed before it becomes a potential election issue.
“The administration is driving this. They want this done, and they want it done now,” said Precursor wireless strategist Rudy Baca, who believes an FCC order is imminent and that the commission likely will take more of a “hard-line” position with Nextel than it has in the past.
Patrick Comack, telecom analyst for Guzman & Co., disagreed with the amount of leverage the FCC has, noting his belief that “Nextel can walk” if it doesn’t like the terms. However, Comack echoed Baca’s opinion that the administration is playing a big role, which he believes will benefit Nextel.
“I guarantee you, President Bush did not spend time in [Nextel CEO Tim] Donahue’s box at Daytona to talk about race cars,” Comack said.
But another source close to the negotiations indicated a deal might not happen until the FCC’s meeting on May 13 “at the earliest,” because there’s no easily identifiable way to resolve all parties’ interests.
In an effort to resolve interference problems for public safety, the FCC is considering a staff report based on the framework of the so-called Consensus Plan, initially proposed by Nextel and which is supported by most major public-safety organizations.
Under the Consensus Plan, interleaved spectrum at 800 MHz would be rebanded to provide contiguous spectrum for public safety and contiguous spectrum for Nextel. Nextel agreed to pay $850 million for the retuning of radios associated with rebanding and also would give public safety 4 MHz of additional spectrum that law-enforcement officials claim is sorely needed.
In return, Nextel is seeking 10 MHz of nationwide spectrum at 1.9 GHz, which it would use to provide advanced data services. The Consensus Plan does not call for Nextel to make any additional payments, but most analysts believe the FCC will ask the wireless operator to pay an additional $2 billion for the spectrum — a price that still would be far less than the spectrum is worth, according to Verizon Wireless.
With so many aspects of the issue in dispute, only a couple of items seem clear. First, the notion of trying to solve the interference issue via technical solutions — a proposal backed initially by Nextel’s wireless competitors and utility companies — appears to be dead. Even Verizon Wireless spokesman Jeffrey Nelson said rebanding is “the right thing to do” within 800 MHz.
But Verizon continues to oppose the part of the plan that would award Nextel additional airwaves outside 800 MHz, claiming that such spectrum should be auctioned. This belief likely means any FCC order based on the Consensus Plan will be challenged in court, which could delay the associated rebanding at least another year.
“The FCC’s scrambling, and they’re realizing this is going to court — the briefs have already been written,” Baca said. “They’re just waiting for the FCC to make a decision.”
Opposition to the FCC awarding valuable 1.9 GHz spectrum to Nextel has been well chronicled, with Verizon describing such a proposal as a spectrum “windfall” to Nextel in filings with the FCC. If the 1.9 GHz airwaves were available for an “immediate” auction and licensed based on PCS rules — something Nextel expects, according to spokesman Tim O’Regan — Verizon said it would submit an opening bid of $5 billion.
A Nextel ex parte letter to FCC said the Verizon vow “lacks credibility,” noting that the many conditions cited “provide Verizon several ready excuses to retract its bid offer.” More important, Nextel described the proposal as “irrelevant,” because auction proceeds must be given to the U.S. Treasury and cannot be earmarked to pay for rebanding, as Nextel has committed to do.
And funding is a big issue to public safety, especially with many communities struggling to stretch their budgets to meet unfunded Homeland Security mandates from the federal government, said Harlin McEwen, chairman of the communications and technology committee of the International Association of Chiefs of Police.
“If [Verizon Wireless] got this to go to auction and they paid $5 billion for that spectrum, we have no solution to the problem,” McEwen said. “As I told [Verizon], ‘Unless you can come up with a solution that pays for our problem and fixes it, then you aren’t doing anything for us — you’re just helping yourselves.’”
In its most recent ex parte letter to the FCC, Nextel characterized Verizon’s various actions as “anti-competitive.” At least one independent source said there is truth to that speculation.
“Verizon has basically told me they are acting as a spoiler,” said one source, who requested anonymity. “They want to stretch out Nextel’s balance sheet.”
Verizon contends Nextel has taken advantage of the opportunities presented in a post-Sept. 11 environment to push a plan that benefits its bottom line in return for addressing an interference problem Nextel should have addressed more effectively in previous years.
“[Nextel] is a multibillion-dollar corporation,” Nelson said. “This is King Midas standing in the welfare line, looking for a handout.”
Given Verizon’s opposition to awarding 1.9 GHz spectrum to Nextel, one alternative that has been discussed at the FCC is using 2.1 GHz spectrum — the airwaves Nextel targeted in its original 2001 white paper calling for a spectrum swap to address the 800 MHz interference issue. Another notion has been to award Nextel the controversial spectrum that NextWave Telecom is scheduled to return to the FCC later this year after reaching a settlement with the agency last month.
O’Regan declined to comment on the NextWave idea, and the fact that the FCC does not yet have those airwaves may make that proposal moot.
However, Nextel was adamant in its letter to the FCC that the 2.1 GHz frequencies no longer work well because changes in the FCC’s spectrum plan means the airwaves are not adjacent to current advanced commercial wireless bands. As a result, the costs of deploying a network using this spectrum would be much greater than at 1.9 GHz. Such a significant change in the proposal at this point also might require the FCC to restart the comment period, Nextel claimed.
In addition, Nextel said substituting 2.1 GHz for 1.9 GHz in the plan would not reduce the odds of the issue being challenged in court.
Indeed, while stopping short of saying Verizon would file a lawsuit to block a 2.1 GHz spectrum award to Nextel, Nelson said Verizon’s legal philosophy regarding auctions is the same for all frequencies. “If there’s spectrum — whether it’s returned spectrum from NextWave, 1.9 GHz or 2.1 GHz — the commission is required by law to auction it,” Nelson said.
Whether such a legal challenge would be successful is debatable. Sen. Ted Stevens, R-Alaska, recently wrote FCC Chairman Michael Powell a letter that said an auction may not be necessary.
“If … Nextel must give up its spectrum in the 700 and 800 bands to eliminate interference to first responders, it must be given replacement spectrum elsewhere,” Stevens’ letter stated. “As author of the spectrum auction program, I do not believe an auction would be required in this instance.”
That may be true, but the legal argument is cloudy enough that courts would hear the case and its appeal. That could be problematic for public safety because many believe Nextel may not be willing to begin paying for 800 MHz rebanding until it is certain it will receive replacement spectrum.
Such certainty may not occur for a year or two, if a spectrum award is litigated. However, Precursor’s Baca said he does not believe a court would let the replacement-spectrum debate delay the all-important rebanding. Instead, he believes any judges hearing the case will separate the issues — allowing the 800 MHz rebanding to proceed while presiding over the 1.9 GHz debate.
“God forbid, if we have another 9/11, no judge wants the story to say, ‘Judge So-and-So blocked a plan that would have solved the communications interference problem that caused people to die,’” Baca said.
Would Nextel be willing to pay for rebanding without an assurance that it would receive desired replacement spectrum? O’Regan deflected numerous questions on the matter, noting that the company does “not comment on hypotheticals.”
“The Consensus Plan was designed as a whole, as a comprehensive solution to solve interference,” O’Regan said. “If [the FCC] adopts something else, we would have to look at it at that time.”
Knowing that a court challenge could delay rebanding at least another year, there is a very real chance that public-safety officials could view Verizon as the problem if it pursues litigation. Gurss said some pubic-safety representatives have told him that “whoever holds this up will be held accountable.”
Exactly what public-safety representatives would do is unclear, but it would be a mistake for anyone to characterize Verizon as an entity that does not want a solution to interference problems it has addressed at its own expense on a case-by-case basis for years, Nelson said.
“We are not the enemy of public safety,” he said.
Nelson said it would be unfair to criticize Verizon if the carrier decides to oppose an “illegal plan.” Instead, public safety should remember that Nextel is the source of the interference problem and is offering a “dishonorable proposal” to solve it in a manner that calls for the FCC to violate spectrum-auction laws.
“The goal has to be a quick solution for law enforcement that is legal,” Nelson said. “It shouldn’t be that difficult.”
Perhaps, but the fact that the FCC’s deliberation in this proceeding is almost two years old indicates otherwise. The problem for public safety is that the Consensus Plan is the only realistic option to the 800 MHz interference problem, McEwen said. McEwen said he understands Verizon’s concerns about Nextel getting 1.9 GHz spectrum but noted that Verizon and other commercial wireless carriers have not offered alternatives — a fact that speaks volumes as public safety is treated like a political football on the issue.
“We’re being kicked around here from goalpost to goalpost,” McEwen said. “In the meantime, the only solution we have is Nextel’s.”
Meanwhile, public-safety officials continue to wring their hands, worried that the unsolved 800 MHz interference problem will result in the fatality or serious injury of a civilian or first responder. “It’s only a matter of time,” Gurss said.
The latest close call occurred in March, when an Elks Lodge in Mesquite, Texas, caught fire. Firefighters’ radios at the scene did not work — a circumstance attributed to interference from a nearby cellular tower used by Nextel, Gurss said.
Because the fire spread quickly, the firefighters attacked the blaze from outside the building. If the units had reached the scene in time to get inside the building, the firefighters would have been at risk with no radio communications, Gurss said.
“Had they rushed inside, it would have been really dangerous,” he said. “No one would have been able to order them to get out, and they wouldn’t have been able to radio for help.”
Although Nextel later fixed the problem, “that didn’t help the firefighters” at the scene, Gurss said.
Such incidents underscore the need for a proactive solution such as rebanding that is executed as quickly as possible. Because there seems to be little question that the matter will land in court regardless, Gurss said he favors the FCC issuing an order soon.
“We’re not afraid of litigation, and the commission shouldn’t be, either,” Gurss said. “The FCC shouldn’t be scared off by threats of litigation. They need to decide to do what they know is right.”