FCC should do the smart thing

Sprint Nextel pleaded its case this week before a federal appeals court regarding an FCC order issued last fall that requires the carrier to vacate its 800 MHZ channels by June 26, regardless of whether reconfiguration is completed. Sprint believes doing so is unfair and places an undue burden on the carrier to find a temporary home for tens of thousands of its iDEN customers until channels currently occupied by public safety licensees are freed.

As I’ve written before in this space, I couldn’t agree more with Sprint on this matter. The dispute never should have reached the courts. The FCC failed to quickly recognize that the “minimum cost” provision of its original rebanding order was the single biggest factor in the glacier-like pace of negotiations between Sprint and the public safety licensees. Once the FCC clarified what it meant—two years after the reconfiguration began—the pace of negotiations picked up considerably. But the rebanding project is woefully behind schedule precisely because so many negotiations took so long.

Consequently, the FCC should give Sprint a break on this issue. The carrier says it will be ready to vacate its 800 MHz channels, wherever reconfiguration has occurred, within 60 days of a public safety licensee’s request, as required by the order. That should be enough.

There could be another reason beyond fairness for the FCC to cut Sprint some slack, as pointed out to me this week by MRT Senior Writer Donny Jackson. The 700 MHz auction ended this week, with just one bidder for the 10 MHz D Block. The $472 million bid was well below the FCC’s $1.3 billion reserve price for the airwaves, which are supposed to be paired with 10 MHz of adjacent public safety spectrum to form the backbone of a nationwide broadband wireless network for first responders.

Speculation for the lack of bidding has centered on the reserve price and the penalty established by the FCC that would require the D Block winner to forfeit 10% of the reserve price should it be determined that it failed to negotiate in good faith with the Public Safety Spectrum Trust, the FCC-designated licensee for public safety’s spectrum.

Indeed, those conditions by themselves would have been enough to give potential bidders pause. But also hanging overhead, like the Sword of Damocles, is the unprecedented public/private partnership that is supposed to build out the network. The fact that such a partnership never has been attempted on a project of this scale would be enough to make any commercial entity wary. But they also had to be wondering about the performance requirements for the network—99.3% coverage of the nation’s population and 99.9% reliability—and whether the FCC would treat them fairly in terms of meeting those requirements.

Cutting Sprint some slack in the 800 MHz dispute would be the right thing for the FCC to do. It also would be the intelligent thing. Unfairly holding Sprint’s feet to the coals by forcing it to prematurely vacate its channels would send a terrible message to any commercial entity still contemplating taking a shot at the D Block spectrum, should the FCC decide to re-auction it.

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