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11.19.2004
Originally featured on BroadcastEngineering.com
GAO: Nextel frequency swap does not violate law

The General Accounting Office has determined that the FCC acted within the bounds of its authority in implementing its plan for 800MHz interference by which Nextel will clear its use of the frequency in exchange for spectrum in the 1.9GHZ band.

Broadcasters have an interest in the plan and the GAO decision because a part of the sweeping spectrum swap will affect some existing users of the broadcast auxiliary service (BAS) spectrum. Under the plan, Nextel would pay the expense of relocating the BAS incumbents.

Nextel competitors had objected to the swap, arguing that it ran contrary to rules prohibiting an exchange of cash for public resources. The plan calls for Nextel to give up its 800MHz spectrum valued at $1.6 billion for new spectrum in the 1.9GHz ban worth $4.8 billion. It also requires Nextel to pay the difference between the two sums less relocation costs to the U.S. Treasury.

This summer, Senator Frank Lautenberg (D-NJ) requested that the GAO investigate whether the plan violated a provision of the Anti-Deficiency Act known as the miscellaneous receipts statute [31 U.S.C. 1341(a)(1)(B)]. Specifically, he asked if awarding the 1.9GHz spectrum to the highest bidder violated the statute.

On Nov. 10, the GAO responded to Lautenberg’s query, determining that it did not find any legal reason that “necessarily disqualifies” the commission from taking its action. However, the GAO did not give a hearty endorsement of the plan.

“Our opinion is limited to the specific legal questions presented in connection with the Anti-Deficiency Act and miscellaneous receipts statute,” said the letter. “It is not an endorsement of the Commission's resolution of the policy, economic, practical, procedural, or other considerations associated with the problem of interference with public safety communications in the 800MHz band. In this regard, we are mindful that although we do not find that the Report and Order violates the Anti-Deficiency Act or the miscellaneous receipts statute, and some of its elements can be found in prior commission actions upheld by the courts, the Report and Order reflects an expanded use of the commission's authority for which there is no exact precedent.

“Further, we are sensitive to financial issues associated with the commission's exercise of its authority under the Communications Act as reflected by the Report and Order. We do not take lightly concerns that the commission's action will result in the government not receiving billions of dollars that otherwise might be realized if the commission exercised its authority to auction the spectrum in the 1.9GHz band.”

For more information, visit www.gao.gov/decisions/appro/303413.htm.

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