Is BearingPoint neutral?
On Feb. 7, Nextel accepted the FCC’s 800 MHz reband order, and the commission and the D.C. Circuit Court of Appeals have denied requests for a stay of the order. This means, court appeals aside, that rebanding may now start in earnest.
Just prior to Nextel’s announcement, the Transition Administrator (TA) released its proposed rebanding schedule. The schedule divides the country into four “waves,” with the region in each wave chosen based upon factors such as population, amount of interference being experienced and proximity to the Mexican and Canadian border regions (a situation that has yet to be resolved).
The first wave will begin at the end of June. At that time, there will be a three-month voluntary and three-month mandatory negotiation period (which overlaps with the actual reprogramming period). Since it often takes that long for a public-safety agency to retain outside consultants, it certainly would behoove licensees to begin their process now. A copy of this filing, and all other relevant documents, may be found at http://www.800mhzrebanding.com.
However, all is not harmonious in the land of 800 MHz. A request has been filed by two 800 MHz licensees to remove BearingPoint from its position as the TA. The basis for the request is that the FCC stated in its 800 MHz reband order that the TA must not have a financial interest in an 800 MHz licensee.
In a recent filing with the FCC, BearingPoint detailed how it intends to create a “firewall” between its TA responsibilities and its work for Nextel on Nextel’s back-office systems. It was revealed for the first time in this document that Nextel paid BearingPoint $31.7 million in 2004 for this back-office work.
Since the FCC did not receive copies of any of the TA applications, it would appear that the FCC was unaware of the extent of the relationship. Since there hasn’t been a groundswell of astonishment on the part of the other TA Selection Committee members (UTC, ITA, APCO and SouthernLinc), it is reasonable to assume that these folks reviewed the situation and decided that the relationship between Nextel and BearingPoint did not disqualify the latter.
Certainly, $31.7 million is not small change. While it only represents approximately 1% of BearingPoint’s annual income, it is substantial by any measure. However, it would be impossible to find anyone qualified to be the TA, who knows something about 800 MHz, but has no relationship whatsoever with any of the parties (licensees or Nextel).
Both BearingPoint and Nextel now have filed oppositions to the removal petition filed by the two 800 MHz licensees. Each entity explains how the the petition is untimely, and how proper consideration of relevant factors was weighed by the Selection Committee. From this seat, as long as a licensee still has the FCC to appeal an TA decision, I’m not particularly concerned.
Further delays in the rebanding process are dangerous, but licensees must feel comfortable about the process. Even if the FCC should find that the firewall procedures are adequate, perceptions are key, and right now the perception by some is that the process is flawed. Unfortunately, that only gives additional fuel to those that believe that the entire 800 MHz rebanding proceeding was flawed. The FCC should take prompt action to assuage the feelings of incumbent licensees and ensure that the process flows smoothly, efficiently and fairly.
Alan Tilles is counsel to numerous entities in the private radio, Internet and entertainment industries. He is a partner in the law firm of Shulman Rogers Gandal Pordy & Ecker and can be reached at firstname.lastname@example.org.
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