Sprint Nextel makes its rebanding case in appeals court
Sprint Nextel argued yesterday before a federal appeals court that an FCC rebanding order approved last fall that requires the carrier to vacate its 800 MHz interleaved spectrum this June unilaterally changed the terms of the commission’s rebanding “contract” with the carrier.
“Oral arguments began and concluded yesterday,” Sprint Nextel spokesman Scott Sloat said. “It took about 20 minutes.”
If Sprint Nextel loses the appeal, the carrier will have to abandon its interleaved channels in the 800 MHz band by June 27—the original completion target for rebanding—even though rebanding likely will not be finished until at least 2012.
“As far as when a ruling happens, that’s really up to the court,” Sloat said. “Since it is on expedited review, we’re obviously hoping something will happen prior to the June deadline.”
Sprint Nextel says the original FCC order stipulated the carrier would have to vacate its interleaved spectrum only after rebanding is finished and it had access to contiguous spectrum in the 800 MHz band. The carrier also claims that the ability to continue operating on the interleaved spectrum while it shuffles spectrum with NPSPAC licensees during rebanding is critical to maintaining its iDEN network, which has seen a 25% decrease in post-paid customers during the last year.
Without access to the interleaved spectrum, Sprint Nextel would need to develop contingency plans, with most industry analysts predicting that the carrier would acquire access to 900 MHz spectrum so it could maintain its iDEN operations in that band.
The appeals court decision will have a notable impact on Sprint Nextel’s finances, according to the company’s 10-K report filed with the SEC a few weeks ago.
If Sprint Nextel wins the case, the carrier expects rebanding will cost the company between $2.7 billion and $3.4 billion, according to the SEC filing. A loss would mean that Sprint Nextel’s rebanding costs “could exceed $3.4 billion by an amount that would likely be material,” according to the company’s 10-K filing.
Mobile wireless consultant Andrew Seybold said a “material” amount for Sprint Nextel would be at least an additional $1 billion. Roger Entner, vice president of communications for IAG Research, said a material increase “possibly” would represent a doubling of Sprint Nextel’s $2.8 billion cash obligation for rebanding.
