05.23.2007 11:00 AM
Commission tells Sprint Nextel 'reasonable, prudent' OK

The FCC gave Sprint Nextel the flexibility it was seeking May 17 to take into account factors other than ensuring that the cost to reband parties covered under the 800MHz Report and Order is the minimum needed to pay for comparable facilities.

In April, Sprint Nextel asked the commission to clarify the standard it should use to determine whether the funds requested for rebanding were appropriate.

Under the 800MHz R&O, Sprint Nextel agreed to take on the obligation of paying for the relocation of those 800MHz licensees covered by the order and to give up its 800MHz spectrum in exchange for the commission allowing Sprint Nextel to operate on 10MHz of spectrum in the 1.9GHz band. That portion of the deal necessitated the relocation of TV BAS users in the 2GHz range to narrower 12MHz digital ENG channels.

Sprint Nextel will receive credit for the expenses it has incurred and the spectrum it has relinquished. If the expenses and the value of the spectrum it gave up are less than the value of the 10MHz of spectrum it receives at 1.9GHz, the company must make a “windfall payment” to the U.S. Treasury for the difference.

Since the process began 21 months ago, Sprint Nextel has interpreted “minimum necessary cost” to mean the “absolute lowest cost.” As a result, Sprint Nextel has had to challenge “virtually every dollar spent on band reconfiguration to assure compliance with ‘minimum cost.’” According to the company, not doing so would put it in jeopardy of failing to comply with its windfall payment obligation and result in the company potentially facing “criminal liability for agreeing to compensation of licensees that is later found to exceed the minimum cost standard.” Sprint Nextel sought “unambiguous guidance” from the commission on the matter.

In its May 17 Memorandum Opinion and Order responding to Sprint Nextel, the commission said its earlier “minimum necessary” language “does not mean the absolute lowest cost in all circumstances.”

Rather, the commission said the term applies to “the minimum cost necessary to accomplish rebanding in a reasonable, prudent and timely manner,” the MO&O said.

“We do not expect Sprint Nextel to insist on reducing rebanding costs to their lowest possible level if the cost savings it seeks to achieve come at the expense of a reasonable, prudent and timely approach toward accomplishing the rebanding task in question,” it said.

In a joint statement from all five commissioners released with the MO&O, the commission expressed its desire to see the rebanding project move forward. “Now that this arcane but contentious economic issue has been resolved, we look forward to the parties moving ahead with the more important and worthwhile work of conducting actual rebanding.”

An FCC spokesman said the clarification of the standard only applied to the portion of the rebanding project Sprint Nextel identified in its request, namely the costs associated with moving public safety frequency users at 800MHz.

To read the MO&O, visit http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-07-92A1.doc.



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