FCC sides with public safety
With a testy dispute regarding nondisclosure agreements resolved by the FCC, officials representing Sprint Nextel and public safety now are discussing proposals designed to address timing issues with the scheduled end of 800 MHz rebanding less than 17 months away.
In a Jan. 25 meeting of officials from Sprint Nextel, public safety and the Transition Administrator (TA), participants received an update regarding the progress of Wave 1 NPSPAC licensees that entered mediation and began to discuss strategies that might help accelerate rebanding so that the project can be finished as close as possible to the current June 27, 2008, deadline.
“There’s clearly some timing issues that have to be worked out overall because there’s an ’08 deadline coming up that doesn’t look very promising that we’re going to reach,” said Robert Gurss, APCO legal and government affairs director and an attorney representing several 800 MHz licensees. “We’re talking at the very early stages what we do about that — what kind of benchmark and guidelines are needed going forward to keep everything on track but recognizing the time it takes to do things.”
One idea that appears to be gathering momentum is allowing licensees to reprogram — or, in some cases, replace — subscriber handsets prior to negotiating a final rebanding agreement with Sprint Nextel. Doing this work when the subscriber units are undergoing regular maintenance provides an opportunity to save valuable time and money, according to proponents.
“One of the things that I think we’re beginning to address is the need to get the subscriber equipment out there much more quickly than we have in the past … which will make these things turn faster,” said APCO President Wanda McCarley.
Although early reprogramming of handset equipment can help compress timelines, few associated with rebanding believe the massive project can be completed within the original 36-month timeline. The exact status of Wave 1 public-safety licensees is expected to be revealed in the TA’s quarterly report that was scheduled to be released after this edition’s press deadline; however, more than half of those 387 licensees still lacked final rebanding deals.
One challenge in meeting the 36-month timeline is the amount of work still to be done and the limited windows of time in which to complete the tasks. For instance, some licensees have towers on top of mountains that can only be accessed during the summer, while Gulf Coast licensees want to avoid rebanding their systems during hurricane season, Gurss said.
Cost disputes were the predominant reason most Wave 1 licensees were in mediation, McCarley said. One item not cited as a problem in any mediation was interoperability, which Sprint Nextel officials have cited as a significant logistical issue when the time comes to relocate licensees. And the TA’s information indicated that public-safety officials now are actively involved in the process — something that was a source of concern last August.
“The numbers clearly indicate that public safety is very engaged, which I thought was significant,” McCarley said. Also significant was the fact that Sprint Nextel and public safety were at the table again. Such communication has been rare as the two sides waited for the resolution of a dispute regarding nondisclosure agreements (NDAs) that had been part of every rebanding agreement signed until the FCC issued a ruling in early January (see timeline on page 10).
For months, Sprint Nextel expressed frustration with estimates from public-safety licensees and their consultants that the carrier believes are higher than necessary, citing quotes from other licensees. Meanwhile, public-safety licensees have argued that NDA obligations — included at Sprint Nextel’s insistence, according to the order — have prevented them from checking with each other to determine whether costs estimates are in line with other quotes.
In its order, the FCC sided with public safety, noting that the NDA proviso “impedes the good-faith obligations” both sides were mandated to follow in negotiations. Public-safety licensees no longer have to comply with NDA language, and the TA will publish various cost estimates so that licensees have a benchmark against which they can compare quotes they receive from vendors. The format of the TA publication has not yet been determined, a TA spokesperson said.
In a statement, Sprint Nextel said it supports the FCC’s decision and hopes that lifting the NDA language will streamline negotiations.
“Now that public safety has the transparency it asked for, Sprint Nextel hopes that all incumbents and their consultants will negotiate with us in good faith, consistent with the commission’s minimum reasonable cost requirements,” the statement said.
Sprint Nextel also had other issues of concern. Questions regarding whether the carrier will have enough network capacity to serve its customer base when public-safety licensees move to the Channel 1-120 frequencies continue to be asked.
More notably, with a growing number of low-margin prepaid subscribers and a substantial decrease in high-margin enterprise customers on its iDEN network, Sprint Nextel lowered its 2007 financial outlook, projecting that the company’s revenues would remain flat or increase slightly. In addition, the carrier announced plans to reduce its work force by 5000 jobs — about 8% of its employee base.
These announcements led to the carriers’ stock price losing more than 10% of its value the following day, but the layoffs should not impact the company’s rebanding resources, said Sprint Nextel spokesman Travis Sowders.
“We remain committed to 800 [MHz rebanding], and [the work force-reduction] announcement should have no impact on our ability to continue working on the reconfiguration and eliminating interference for public safety,” he said.
REBANDING CRUNCH TIME
Most attention to date has been on Wave 1 NPSPAC licensees, but others are nearing critical junctures, too:
FCC issues order regarding nondisclosure agreements.
TA announces that Wave 4, Stage 2 licensees will have 45 days to submit planning-funding requests after receiving their new frequency assignments.
Mediation period begins for Wave 2, Stage 2 licensees. Mandatory negotiation period begins for Wave 3, Stage 2 licensees.
TA expected to release quarterly report.
Mediation period begins for Wave 3, Stage 2 licensees. Mandatory negotiation period scheduled to begin for Wave 4, Stage 2 licensees with new frequency assignments.
Sources: FCC, TA