An unlevel playing field
Folks involved in 800 MHz rebanding may be aware of the recent Charles County, Md., decision. The FCC relied heavily on the so-called “TA Metrics” to determine which of Charles County’s proposed costs were reasonable.
The Transition Administrator’s first metric reports were semi-annual compilations of deals and their relative costs. The metrics were highly generalized, out-of-date quickly and fairly useless for licensees. However, the TA later morphed this process into an individualized set of comparisons for each licensee entering into negotiations. This document is given to each licensee at the beginning of negotiations.
The Charles County appeal and several other filings point out that the TA metrics still have too few details to be useful for licensees. But the primary problem with the current configuration of the metrics is that the only differentiation of systems is based on the number of mobile units operating on the system. Unfortunately, this results in the grouping of extremely divergent systems. Thus, a statewide system with 10,000 units is lumped in with a city system with the same number. As a result, the state system’s travel costs (for example) are extremely high as compared to the city’s travel costs.
Similarly, there is no differentiation between systems of different manufacturers and the number of units to be replaced. Consequently, because the numbers are only presented with regard to percentiles, it is impossible for licensees to determine what types of systems make up the category.
Originally I was a proponent of releasing of the TA metrics. As Nextel already had all of the information about every deal, and was constantly using such “comparisons” in negotiations without providing specifics, I thought it would be helpful for the licensee to have access to the same information. In fact, in many cases where we’ve been able to obtain details of the supposedly similar deals, we’ve been able to disprove that similarity. To me, information is king, and it creates an unfair negotiation when only Nextel has the comparative information.
We have discussed with the FCC and the TA the release of metric information that would be useful for comparison purposes. The question is, how much detail can be provided that would be useful — i.e., not so granular as to be confusing — but at the same time not compromise any confidentiality that individual licensees may require. In those cases where we’ve been able to obtain the granular information, it has been extremely helpful to the licensee’s case. Because we’re involved in such a high number of rebands, it was pretty easy to figure out which system was which, and provide details regarding differentiation.
Unfortunately, not all licensees are aware of the availability of granular metrics, nor do many have institutional knowledge to be readily aware of the differentiations. A couple of months ago I called in this column for licensees to share their cost estimates with each other, as permitted by the FCC, but I haven’t seen a lot of folks doing this.
In addition to the application for review of the aforementioned decision, which was filed by Charles County, several public-safety trade associations have asked the FCC to make available, upon request, the details of the various systems that make up the relevant comparison category being reviewed. We certainly hope that the FCC heeds the call, and corrects the current unlevel rebanding negotiation playing field.
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Alan Tilles is counsel to numerous entities in the private radio and Internet industries. He is a partner in the law firm of Shulman Rogers Gandal Pordy & Ecker and can be reached at firstname.lastname@example.org.