Commission postpones date for Sprint Nextel ‘true-up’ process

On Dec. 19, the Federal Communications Commission granted a request from Sprint Nextel to postpone a financial rectifying procedure, known as the “financial true-up process,” until after the company’s 800MHz rebanding project is complete.

The action, released to the public on Dec. 23, deferred the true-up date from Dec. 26, 2008, to July 1, 2009, and directed the 800MHz transition administrator to submit a report to the commission by May 1, 2009, to recommend whether to allow the new deadline to stand or to postpone it further.

The true-up process is a financial reconciliation with the federal government that the company must fulfill as part of spectrum reconfiguration that ultimately will make portions of the 1.9GHz band available to Sprint Nextel for wireless service. As part of the process, Sprint Nextel is allowed to apply credits for its costs for the 800MHz rebanding and the 2GHz Broadcast Auxiliary Service (BAS) relocation process against the cost of the 1.9GHz spectrum it will receive. The company is required to pay any difference between the value of the credits and that of the spectrum to the U.S. Treasury.

Originally, the commission gave the company 36 months, which expired June 26, 2008, to complete the rebanding and relocation work and fulfill its true-up obligations. One day before the deadline, the company requested the commission postpone the true-up process until the 800MHz rebanding and 2GHz BAS relocation projects were completed. In asking for the true-up postponement, the company cited the unforeseen complexity of the projects and delays. According to Sprint Nextel, complying with the December true-up deadline would require intensive accounting and divert resources from fulfilling its rebanding and relocation obligations. Additionally, only a portion of the rebanding costs were incurred during the initial 36 month period. According to the company 90 percent of BAS licensees will have relocated after the original June 26 deadline, which means the company will have incurred a large portion of the expenses after the original true-up date.

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