Nextel CEO: 2.1 GHz alternative “unacceptable”
Nextel Communications CEO Tim Donahue today declared as “unacceptable” a CTIA plan that would substitute 2.1 GHz spectrum for the 1.9 GHz airwaves Nextel wants as part of a rebanding plan to resolve interference at 800 MHz, according to a letter Donahue wrote to FCC Chairman Michael Powell.
Donahue’s letter was delivered in the wake of a proposal from the Cellular Telecommunications and Internet Association, which last week called for Nextel to pay $3 billion into a trust to fund rebanding costs at 800 MHz and receive 2.1 GHz spectrum. Yesterday, CTIA filed a comment with the FCC that the 2.1 GHz spectrum is comparable to the 1.9 GHz airwaves Nextel wants as replacement spectrum.
In his letter to Powell, Donahue disputed this notion, noting that it would cost Nextel much more money to have vendors develop equipment for 2.1 GHz.
“My responsibility to Nextel’s shareholders requires that Nextel obtain comparable value in any retuning transaction: 2.1 GHz does not meet that test,” Donahue said in the letter. “Nextel cannot and will not accept that result and will avail itself of every possible legal challenge to the outcome.”
Nextel plans to use the replacement spectrum gained through the 800 MHz proceeding to offer advanced wireless data services. In his letter, Donahue said the CTIA proposal is a “collusive gambit” by Nextel’s commercial wireless competitors to delay his company’s entry into the market and to increase its cost of doing so. The tactic “is the height of anticompetitive audacity” and warrants FCC rejection on those grounds.
“The sole goal of the 2.1 GHz advocates is to decrease competition and inflict damage on Nextel by manipulating this proceeding to force Nextel to accept—at great cost—inferior replacement spectrum,” according to the letter.
Many analysts believe Nextel would assume some political and public relations risk by opposing any FCC order, especially after spending more than two years educating the public and policy-makers about the interference issues plaguing public-safety organizations at 800 MHz. From a legal standpoint, however, most believe Nextel can do so.
“Listen, Nextel can walk,” said Patrick Comack, telecom analyst with Guzman & Associates. “They can’t be forced to do anything…They don’t have to pay one penny to do anything to solve interference.” And Comack said he believes Nextel should do that rather than accept an FCC order that mirrors the CTIA proposal, which calls for Nextel to pay as much for 2.1 GHz airwaves as most analysts’ have predicted it would have to pay for more valuable 1.9 GHz spectrum.