Plenty of blame to go around
‘It wasn’t supposed to be this hard.” That was the bewildered statement of a former Nextel Communications employee with close knowledge of the 800 MHz rebanding situation upon being told about the scarcity of deals between the wireless carrier and public-safety licensees in the band.
Indeed, when the FCC released its rebanding order three years ago, the 256-page length of the ruling belied the straightforward notions it contained. Under the order, the 800 MHz band would be reconfigured to alleviate cellular interference to public-safety systems in a three-year period with Nextel bearing the expense, so other 800 MHz licensees would not be out of pocket any money during the process. The goal was to let licensees migrate to “comparable facilities” with minimal disruption.
But 25 months into the 36-month schedule established by the Transition Administrator overseeing the project, 800 MHz rebanding has proved to be a notably different process than many envisioned. Thus far, legal representatives for the TA, 800 MHz licensees and the carrier — known as Sprint Nextel since the merger announced shortly after the FCC released the rebanding order — have dominated the process amid extended negotiations that have generated heightened frustration from all parties.
As a result, the vast majority of public-safety licensees have not even reached a rebanding agreement with Sprint Nextel, and only one NPSPAC system had been rebanded as of press time. No one believes rebanding will be completed as scheduled next year, and many involved in the process believe another two years will be needed to complete the enormous task.
What went wrong? When the cases are considered on an individual basis, the reasons for the difficult negotiations are numerous and varied, with all involved being subject to finger-pointing when observers cite missteps in the process. Consultants and vendors tried to charge too much, public safety waited too long to get engaged in the process, the FCC and the TA were too slow in ruling on disputes, and Sprint Nextel lacked a sense of urgency.
While there is some truth to each of these explanations, there is growing sentiment that the root causes of rebanding delays can be traced to the FCC’s original order — a delicately balanced document reflecting political and legal limitations that led to a process that was destined to be much slower than initially anticipated.
Such limitations are most obvious in the direct negotiations between licensees and Sprint Nextel, something that was not contemplated in the Consensus Plan that served as the blueprint for the FCC’s order. Under the Consensus Plan, Nextel would write a check — the publicly discussed amount was $850 million — to the government, which would fund rebanding in a manner similar to the government grant programs with which public safety is familiar.
“I believe that applying for a government grant was easier than [negotiating with Sprint Nextel],” said Steve Proctor, executive director for the Utah Communications Agency Network. “We’ve applied for — and been successful in receiving — several government grants. It’s a pretty black-and-white process with several justifiable things that you have to provide.”
But two realities undermined a grant-program approach to rebanding. First, the FCC cannot handle money not appropriated to it by Congress, so it could not accept payment from Nextel to run such a program. Second, no one knew how much it would cost to reconfigure the 800 MHz band, making it virtually impossible to establish a cap for Nextel that also would ensure enough money to complete the massive rebanding task.
In a move heralded by public safety, the FCC order required Nextel to pay all rebanding costs, without a cap. But with this uncapped financial obligation came the need to let Nextel negotiate individual deals with each of the affected licensees.
“I think that substantially all the tension in the 800 MHz rebanding is a function of Nextel’s desire — one that’s quite reasonable — not to exceed its minimum obligation,” said Carl Aron, executive vice president for RCC Consultants. “They were placed in a posture where they had to defend their exposure, and they did everything they could under the rules of the game to achieve that result.”
Aron steadfastly believes the rules of negotiations favor Nextel, which is a commercial entity accustomed to cutting deals and able to benefit from the experience of negotiating with all licensees. Just as important, public-safety licensees were handicapped early because there was no process for securing planning funding, and licensees that did work without prior approval risked not having that work approved for reimbursement.
“Even when planning funding became in theory available, it only became available if you had the money to fight through a mediation, because there was no pre-planning funding,” Aron said.
Requests for planning funding often have required mediation because even these preliminary agreements have required a “surprising” level of detail, Proctor said. Rick Burke, managing partner of Televate, said he does not understand the need for the lengthy negotiating of disputes — particularly those related to planning funding — that became “insulting” to client licensees and consultants in some cases.
“If you [Sprint Nextel officials] don’t agree, why don’t we do what we do in any other project — we invoice as we go along, and we justify what we have to do,” Burke said. “To project the cost of doing a program that’s never been done is not an easy thing to do for anyone. That’s a difficult thing, to be asked to do that and then be told that you’ve not done it right.”
Sprint Nextel contended that it was obligated to challenge virtually all cost estimates because it perceived the FCC’s “minimum cost” stipulation to mean that it had to meet government standards for justification of expenses. Several cases have been cited in which the fees associated with the representatives negotiating the dispute exceeded the amount of money being disputed.
Hopefully, such scenarios will not be repeated after the FCC in May clarified its rebanding cost standard, after Sprint Nextel requested a ruling on the matter in April, Sprint spokesman Scott Sloat said. “The FCC’s clarification on the cost issue has been a significant help, and we thank the FCC for clarifying that,” he said. “That’s really helped speed up the process tremendously. It’s a step in the right direction and is having a positive impact on the process.”
That may be the case, but many public-safety representatives have asked why the cost-standard question was not addressed earlier. Aron said much of the blame for this and other rebanding problems rests with the Transition Administrator, which he said lacked expertise in public-safety communications and initially focused more on processes than getting rebanding completed.
“I don’t think the TA brought a real understanding of the situation at all,” he said. “They wasted a lot of time, they didn’t provide the leadership, they didn’t bring the deep and critical understanding to what needed to be done. They did a lot of process work, for which they were paid a lot of money, but leadership wasn’t part of their outlook.”
TA officials have contended that its role in the rebanding process is to be a neutral facilitator of private negotiations — a far cry from the “judge and jury” role Proctor said he expected the TA to play when rebanding was announced.
One aspect of rebanding the TA cannot change is that all rebanding work is scheduled to be completed by June 27, 2008 — a deadline that will not be met; as Burke noted, the work could not be done that quickly, even if agreements with all licensees were in place.
Public-safety officials have expressed the fear that moving the deadline would lead only to more delays and a lack of urgency to get rebanding completed, but Aron said he’s concerned that the problems associated with rebanding will not be addressed properly until the FCC acknowledges that the deadline won’t be met. Instead, the agency has adopted a policy of treating rebanding cases not completed by the deadline on a case-by-case basis, although failing to meet the deadline promises to be more the rule than the exception.
“My concern is that if you don’t have that admission, how do you ever have a general reconsideration of how to fix the problem?” Aron said. “If you treat the situation as one that’s just made up of exceptions, then you never have a systemic solution, because everything is an exception, by definition.”
TOUGHER THAN EXPECTED
KEY DATES IN 800 MHZ REBANDING
July 8, 2004
FCC approves order calling for Nextel Communications to pay costs associated with reconfiguring the 800 MHz band.
Feb. 1, 2005
Transition Administrator reveals schedule to complete rebanding in a three-year period ending on July 27, 2008.
July 27, 2005
800 MHz rebanding begins.
Feb. 1, 2006
TA announces new rules designed to accelerate the approval of planning-funding requests; voluntary negotiations begin for NPSPAC licensees.
May 26, 2006
FCC extends the mandatory negotiation period for NPSPAC licensees in Wave 1 by three months.
March 22, 2007
TA announces subscriber equipment deployment (SED) program to let licensees reband mobiles and portables before reaching final agreements with Sprint Nextel.
June 4, 2007
TA releases quarterly report for the first quarter. As of March 31, 45% of Wave 1 NPSPAC licensees had submitted a rebanding agreement to the TA. Some Wave 1 NPSPAC licensees still lack planning-funding agreements.