Reports: Powell pulls support for Consensus Plan
Multiple reports indicate that FCC Chairman Michael Powell on Friday pulled his support for the so-called Consensus Plan to resolve interference issues for public-safety communications operating at 800 MHz by rebanding the frequencies.
Under the Consensus Plan, Nextel Communications–the wireless carrier creating most of the interference–agreed to pay $850 million to reband affected 800 MHz users and provide 2.5 MHz of 800 MHz spectrum for public-safety uses in return for contiguous spectrum at 800 MHz and 1.9 GHz. A majority of the FCC reportedly supported the plan in early April.
But Nextel’s wireless competitors have resisted the notion of the FCC awarding the valuable 1.9 GHz airwaves without an auction, and Verizon Wireless has vowed it would bid at least $5 billion for the frequencies if given a chance. On April 29, the Cellular Telecommunications & Internet Association proposed the FCC instead award Nextel less-valuable spectrum at 2.1 GHz–an action Verizon Wireless said it would not challenge in court, making it more likely that rebanding would not be further delayed.
The Council for Citizens Against Government Waste (CCAGW) Friday issued a press release proclaiming a “victory for taxpayers” with reports of Powell’s decision to pull his support from the Consensus Plan. Without Powell’s vote, the commission does not have a majority to support awarding Nextel 1.9 GHz spectrum, which the group claims should be auctioned to maximize its public benefit.
“This was a sweetheart deal for Nextel that would have put rival carriers at a competitive disadvantage,” CCAGW President Tom Schatz said. “Thankfully for consumers and taxpayers, the FCC appears to be reversing its intention to give away billions of dollars worth of spectrum. The airwaves are a public resource, and that money rightfully belongs to the taxpayers.”
But Powell’s action does not necessarily mean the commission has taken 1.9 GHz off the table, according to Guzman & Co. telecom analyst Patrick Comack. In a report issued Friday, Comack said Powell “procedurally” had to remove his support from the 1.9 GHz award in order to participate in discussions regarding the relative valuations of 1.9 GHz and 2.1 GHz spectrum. Others familiar with the FCC discussions echoed Comack interpretation.
“Apparently, Mr. Powell, in order to argue spectrum values, had to take his name off the prior order,” Comack wrote in his report. “However, this, in our opinion, no way indicates that he is ‘against’ offering Nextel the 1.9 GHz.”
Nextel President and CEO Tim Donahue declared 2.1 GHz spectrum “untenable” to his company’s shareholders, and the FCC “would almost have to pay Nextel to take it,” according to Comack. Because the FCC is under pressure from public safety and the security-conscious Bush administration to fix the 800 MHz interference problem, Comack believes Nextel eventually will be awarded 1.9 GHz airwaves.
“Now, Nextel will either get 10 MHz of 1.9 GHz at a discount, or they will get 2.1 GHz, basically for free,” Comack wrote. “Or Nextel will walk, and that’s not what Mr. Powell can afford, especially when it looks obvious to us that the White House and Mr. Powell want this issue wrapped up ASAP, and probably before the end of this month.”
