One down, two to go

With the passage of yet another wave of largely unsuccessful negotiations between NPSPAC licensees and Sprint Nextel regarding 800 MHz rebanding agreements, the FCC addressed one of three key issues the wireless carrier believes can jump-start the behind-schedule reconfiguration effort.

In one of its most significant rulings to date, the FCC clarified the “minimum necessary cost” aspect of the rebanding order, which Sprint Nextel officials have claimed to be the root of the company’s hardline stance in negotiations with 800 MHz licensees. In an April letter to the commission, Sprint Nextel said it interpreted the term to mean “absolute lowest cost,” which forced the company “to challenge virtually every dollar spent on band reconfiguration” — a tactic that has resulted in more than 90% of NPSPAC licensees being forced to enter mediation in an effort to cut a deal.

But the FCC said Sprint Nextel’s assumption was misguided, because the “minimum cost” reference should have been considered as part of the commission’s guidance that expenses be “reasonable and prudent.”

“The minimization of costs is emphatically not the sole or even the primary purpose of the rebanding process,” said FCC Chairman Kevin Martin and other commissioners in a joint statement that described the cost question as an “arcane” issue. “More important is that rebanding proceed as quickly and effectively as possible.”

Thus far, few have argued that negotiations with NPSPAC licensees has moved quickly or effectively. On May 1, 98.8% of 258 NPSPAC licensees in Wave 3 entered mandatory mediation because they lacked a final rebanding agreement. In its ruling, the FCC noted the fact that such extended negotiations, if avoidable, create an unwanted cost.

“In many cases, the resulting cost of prolonged negotiation and mediation appears to be higher than the savings that resolution of the disputed issues would generate,” the FCC ruling states. “In addition, prolonged negotiation and mediation of cost issues in multiple cases has impeded timely completion of the rebanding process.”

Indeed, not much has been timely in the rebanding of NPSPAC licensees. After 23 months of what the FCC ordered to be a 36-month process, no NPSPAC licensees had moved operations to their new frequencies. In fact, no NPSPAC licensee was even scheduled to move as of press time.

Sprint Nextel and public-safety officials are hopeful that will change if the FCC acts on their joint recommendation to have the Transition Administrator (TA) schedule some NPSPAC licensees this year and develop benchmarks to get others done in the future.

In addition, Sprint Nextel requested a change in the negotiation periods for licensees that would give them 90 days to negotiate with the licensee after the licensee submits its statement of work and cost estimates (see table).

While the FCC has not acted on either of these items, it did issue two other rulings that offered potential precedents. One addressed deployment issues related to New York’s “Metro-21” state system, which the state is replacing, so Sprint Nextel does not have to pay any retuning costs.

New York officials want to install the new system on its new rebanded frequencies and offered multiple dates early this year to make the transition. But Sprint Nextel has refused to make the spectrum available — the carrier is using the frequencies for its network now — and offered no alternatives, stating that it wanted to wait until the FCC acted on its joint letter with public safety asking for the TA to devise a coordinated scheduling timetable for the entire region.

But the FCC ruled Sprint Nextel’s deferral of the transition date indefinitely did not meet the commission’s standard of “good faith” negotiations and amounted to a “unilateral decision to delay” the rebanding of the Metro-21 system. Commissioners ordered the carrier to meet with the state within 15 days to negotiate a transition that would have Sprint Nextel vacate the targeted spectrum by June 26, 2008 — the conclusion of the FCC’s 36-month window for the project — regardless of any decision regarding coordinated planning.

“The mere filing of a [request for TA planning] letter does not have the effect of staying ongoing band reconfiguration for all licensees — licensees who are ready to reconfigure their systems should not be prevented from doing so,” the FCC ruling states. “Moreover, the filing of the letter does not alter [Sprint Nextel’s] clear obligations under the 800 MHz Report and Order to negotiate in good faith and to complete rebanding in accordance with the 36-month timeframe.”

The commission also opposed a mediator’s recommendation in ruling that Sprint Nextel must pay to replace mobile radios in Tazewell County, Ill., to ensure that the county maintains its ability to access all NPSPAC channels, even though it is not licensed to operate on any anything other than mutual-aid frequencies.

In the ruling, the FCC said Tazewell County’s mobile radios should maintain their ability to access NPSPAC channels after rebanding under the commission’s “comparable facilities” standard. Sprint Nextel will have to pay an additional $500,000 to replace the radios.

Alan Tilles, an attorney representing Tazewell County in the case, said he knows of at least five rebanding cases in which the issue was in dispute, with the dispute being the only significant roadblock to final rebanding agreements in three of the cases.

“We are extremely pleased that the commission agreed with Tazewell’s position that the licensee must have the same capability before and after rebanding — regardless whether they’re presently using that capability,” Tilles said.

The cost-issue decision is expected to have an even greater impact, which is much needed in the minds of several vendors and contractors directly or indirectly involved in rebanding. Motorola, which is expected to replace hundreds of thousands of radios during the rebanding process, had sold only about 1000 rebanding radios as of press time, said Chuck Jackson, Motorola’s vice president and director of system operations.

However, with a large order of flash kits for the state of Colorado and the hope that the TA’s subscriber equipment deployment program will drive more orders, Jackson expressed cautious optimism that rebanding will begin to see greater movement in the near future.

“I think the faucet is starting to drip,” Jackson said.