Verizon Wireless: Public safety’s new best friend?
They say Hallmark has a card for everything, but I’m not sure if it has one that says, “I’ve hated your guts for the past two years, but thanks for making my life so much better.”
If such card exists, public-safety officials may want to send one to Verizon Wireless.
Extending even the smallest nicety to Verizon Wireless may be unthinkable to many public-safety leaders. After all, they have battled the wireless giant seemingly at each turn of the ever-winding road that resulted in the FCC’s 800 MHz reband order, but the fact remains that public safety is much better off today because of Verizon’s unwanted participation in the process.
The Consensus Plan — created from negotiations between Nextel Communications and public safety — was a terrific template for resolving interference problems for public safety, but the $850 million that Nextel agreed to pay likely will prove to be less than the amount needed to do the job.
It also represented a huge spectrum giveaway — an issue public safety couldn’t care less about, but a huge problem for Nextel competitors like Verizon Wireless. Thus, the wireless industry — led by Verizon — offered an alternative proposal, which increased significantly the cash that would be available for the expensive rebanding project.
Public safety widely criticized this plan, saying it would undermine the Consensus Plan, but it was the best thing that could have happened. Without an alternative, the FCC had little or no leverage in its attempt to get Nextel to assume all costs of rebanding — and Nextel’s stockholders would have had a fit if the company’s management did so voluntarily.
Although the 800 MHz process took a painfully long time, this week’s settlement between Nextel and Verizon Wireless means FCC Chairman Michael Powell is one huge step closer to bringing closure to an issue fraught with political and legal land mines.
Given Verizon’s outspoken opposition, the settlement was a surprise to many, but not challenging the 800 MHz order made perfect business sense — something we have said repeatedly in this space. Verizon didn’t want Nextel to be able to enter the advanced wireless services marketplace on the cheap, and the FCC’s $4.8 billion valuation of the 1.9 GHz spectrum for Nextel assured that didn’t happen.
Once that happened, things got relatively quiet at Verizon. Its press release after the FCC approved the order was worded harshly, but it didn’t say the company would file a lawsuit. Though Verizon would never admit it publicly, being cast as an enemy to public safety — a potentially lucrative market for the carrier in a post-CDPD world — would not be good business.
It also wouldn’t be good politics, especially at a time when national security is a priority. Suing the government over an order that delivers many of the items cited in the 9/11 Commission report would have cost Verizon serious political brownie points as it asks federal policymakers for massive deregulation for its wireline division.
We’ve yet to hear from the U.S. Government Accountability Office about its legal opinion, but I’m not sure it’s going to matter. Did the FCC overstep its authority in determining where Nextel’s payment gets spent — the kind of money decision Congress is supposed to make? Probably, and that could set a bad precedent.
But the bottom line is that the FCC apparently has solved this politically charged and technically messy situation, and it won’t cost Congress a dime of public funds — in fact, it may generate new money for the U.S. Treasury, because Nextel will clear broadcasters off 1.9 GHz spectrum that can be auctioned.
Congress has a choice: Let the FCC order be executed (or just rubber stamp it, so Congress can say it passed it), or reopen a huge political can of worms by trying to strike another agreement that would require U.S. taxpayers to pay for rebanding — all the while being blamed for delaying a solution.
I can’t imagine lawmakers want any part of 800 MHz debate, especially if it costs them money they’d rather spend elsewhere in the budget.
Should Congress back off, public safety will emerge the huge winner in all of this.
Yes, Verizon’s not-so-veiled threat that FCC commissioners might be subject to criminal prosecution and its support of the First Responders Coalition that tried to derail the 800 MHz order may be borderline unforgivable to some. But there’s little question that those tactics ultimately helped Nextel feel fortunate to pay all rebanding costs, instead of resisting the notion — something it might have done if there were no opposition to the Consensus Plan.
Sure, Verizon was acting in its own self-interest the entire time, as was Nextel. But, for public safety, Verizon’s unwanted actions have led to a deal that looks like a dream come true.
And that may be worth a thank you card.
E-mail me at djackson@primediabusiness.com.
