800 MHz rebanding: Still more questions than answers

It’s often said that the toughest part of any journey is taking the first step. That certainly seems to be the case for 800 MHz rebanding, based on the initial reactions from attendees at last week’s APCO Winter Summit to the Transition Administrator team’s first presentation of its schedule.

Actually, the four-wave schedule to be completed in a 36-month period ending in mid-2008 made a lot of sense, especially after Transition Administrator officials explained all the moving parts that had to be factored into the timeline.

But when attendees tried to dig a little deeper to determine exactly what they need to do to make the schedule a reality, too many answers were noticeably lacking.

The confusion begins with the first step — taking inventory of all equipment that needs to be reprogrammed. This is the most immediate task for all licensees and a potentially complicated one, especially for a licensee with lots of entities using its spectrum other than itself. The licensee is the contact point in this process, so it is the licensee’s responsibility to make sure that all affected parties using its system note every piece of equipment — whether used daily or stored in a back-room closet for a rainy day — that needs to be reprogrammed.

It’s a critical step and one that licensees cannot take lightly.

First, Nextel Communications essentially will not negotiate a contract with a licensee until the inventory is complete. Second, forgetting a bank of radios in the inventory process has potentially awful ramifications. In a best-case scenario, a licensee — not Nextel — may have to foot the bill to reprogram the missed equipment. In a worst-case scenario, first responders are sent to an emergency using radios that don’t communicate with anyone else and actually interfere with the new users of the spectrum.

Obviously, it’s important for licensees to complete a thorough and accurate inventory of affected equipment. But more than one attendee at the APCO Winter Summit expressed disappointment that no clear process had been established to pay those who do the inventory work.

Remember, a fundamental premise of the FCC’s order is that 800 MHz licensees would not have to dip into their own pockets to fund any aspect of rebanding. However, if a contract cannot be negotiated until the inventory is completed, how can a licensee be assured that Nextel will pay those doing the inventory work?

It’s hard to imagine a third-party consultant being willing to provide inventory services without knowing whether Nextel and the Transition Administrator will deem the rate being charged as “reasonable.” The same goes for licensees that decide to handle the inventory job internally. Will Nextel and the Transition Administrator deem paying a senior communications official’s hourly salary as “reasonable”? What about overtime?

And the timing of the payment could be problematic. The Transition Administrator’s schedule calls for a six-month period just to negotiate a contract to implement rebanding. It’s doubtful anyone picked to do the inventory work — be it a consultant or an internal employee — will want to assume responsibility for such a potentially large task with the possibility of not getting paid for six-plus months.

More likely, there will have to be an initial negotiation between the licensee, Nextel and the Transition Administrator to determine the parameters of the cost to do inventory — an added layer of negotiation that could prevent the Transition Administrator from meeting its stated timeline. Otherwise, the licensee would have to pay for the inventory work and hope that Nextel and the Transition Administrator approve full reimbursement — the precise scenario the FCC hoped to avoid when it passed the 800 MHz order.

Hopefully, a streamlined process can be established to handle the inventory situation quickly, so Nextel and the Transition Administrator can focus on other sticky topics, like how to efficiently execute a contract that requires a three-way agreement and whether licensees can use money earmarked for rebanding to upgrade their systems.

Licensees can take solace in the fact that, based on the approach used to develop the schedule, the Transition Administrator team appears to be a more-than-competent group that is fully capable of resolving these issues. But for 800 MHz licensees eager to learn how to take the initial step toward rebanding, the Transition Administrator’s first impression was disappointing.

E-mail me at djackson@primediabusiness.com.