800 MHz rebanding seems on track

Though Nextel Communications has not agreed to the terms of the FCC’s 800 MHz order, a series of positive events during the past month have public-safety officials optimistic that the rebanding process will begin in earnest early next year.

When the FCC unanimously approved the controversial plan in July, public-safety officials applauded its stipulations requiring Nextel to pay all costs associated with rebanding. Privately, however, many expressed skepticism that the order would clear the multiple legal, political and economic hurdles that threatened to delay — if not dismantle — the rebanding plan to alleviate interference problems for public-safety communications in the band.

A primary legal concern was erased in early November, when Nextel settled all its disputes with rival Verizon Wireless. As part of the deal, Verizon said it would not litigate the 800 MHz order, while Nextel agreed not to challenge Verizon’s use of phrases such as “push-to-talk” in its marketing.

Another possible snafu existed on Capitol Hill, where Sen. Frank Lautenberg (D-N.J.) had asked the Government Accountability Office (GAO) to determine whether the FCC overstepped its authority by directing funding associated with a spectrum award — a task reserved for Congress when airwaves are auctioned.

On Nov. 7, the GAO issued a legal opinion that the 800 MHz order did not violate federal law, although it said the rebanding plan “reflects an expanded use of the commission’s authority for which there is no exact precedent.”

Many Beltway sources said that even a negative GAO opinion might not have mattered, noting that Lautenberg made his request on June 29, when published reports indicated the FCC planned to have Nextel pay only $850 million in cash. That amount likely would have forced Congress to find additional funds to complete rebanding, and critics claimed it effectively would represent a “giveaway” of the swath of 1.9 GHz spectrum included in the deal for Nextel.

But the FCC order calls for Nextel to pay all rebanding costs, with the wireless carrier paying at least $3.2 billion cash in addition to spectrum contributions valued at $1.6 billion. Even Nextel opponents indicated the $4.8 billion package was a fair valuation of the 1.9 GHz spectrum. Meanwhile, Beltway sources said that lawmakers probably could not cut a better deal and had little desire to be involved with the politically charged issue.

“There is nobody on the Hill who has told us they want to deal with this,” said Harlin McEwen, chairman of the communications and technology committee of the International Association of Chiefs of Police.

Meanwhile, Nextel raised several concerns with the order, the most notable being its assertion that the FCC miscalculated the value of its spectrum contributions by at least $400 million dollars, wrongly inflating the wireless carrier’s minimum cash payout. A comment period addressing this and other possible changes was due to end on Dec. 2, after which the commission could alter its original order (see timeline on page 8).

“I think the FCC will take care of this very quickly,” said Rudy Baca, Precursor wireless strategist.

Assuming any FCC alterations remedy Nextel’s key concerns, the next key date would be Dec. 22, which is the deadline for all petitions for reconsideration and judicial review of the order. If there are no substantial challenges to the rebanding plan, Nextel is expected to formally accept the terms of the order, which would give the wireless carrier the contiguous spectrum it needs in the 800 MHz and 1.9 GHz bands to offer the advanced services needed to compete against rivals such as Verizon Wireless.

Nextel spokeswoman Leigh Horner declined to speculate when Nextel might announce its decision but acknowledged that the carrier is interested to “see what the FCC will do” with the proposed changes. Technically, Nextel does not have to decide what to do until Feb. 7, 2005, but Baca believes the wireless operator will formally accept its rebanding obligations soon after the Dec. 22 deadline if it likes any FCC changes to the order, and there are no legal challenges.

If that proves to be the case, there could be a special New Year’s celebration in the public-safety community, which had long presumed that expected litigation by Verizon Wireless would create a cloud of uncertainty over the 800 MHz process.

“I think, in the end, public safety came out the clear winner in this long, hard fight — it’s nice to see the planets were aligned in our favor, for once,” said Charles Werner, deputy fire chief in Charlottesville, Va. “Without this settlement, we were concerned that we would have a continued fight, prolonged issues and a question whether this would ever happen.”

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