At last week's open commission meeting, the FCC approved a plan in which Nextel would cover the cost of relocating broadcasters that held licenses in the 1.99 to 2.11 GHz band before the FCC reallocated 35 MHz of spectrum (two channels) of the band to the Mobile Satellite Service. The plan appears to be similar to the Joint Proposed BAS Relocation Plan sent to the FCC by MSTV, Nextel, and NAB but details won't be available until the FCC releases the text of the decision. The FCC News Release FCC Adopts Solution to Interference Problem Faced by 800 MHz Public Safety Radio Systems -- Band Reconfiguration and Enhanced Best Practices Are Key Elements dealt mostly with the 800 MHz side of the plan, noting only "as a new entrant in the 1.9 GHz band, Nextel is also obligated to fund the transition of incumbent users to comparable facilities."
Under the plan, Nextel will surrender some spectrum in the 800 MHz band, making 4.5 MHz of spectrum available for public safety, critical infrastructure, and private wireless users. It will also give up rights to all of its licenses in the 700 MHz band. In exchange for this, Nextel's licenses will be modified to allow operation in the 1910-1915 MHz and 1990-1995 MHz spectrum if it fulfills certain obligations specified in the FCC's decision. For information on the MSTV, Nextel, and NAB plan for the 2 GHz relocation, see RF Report for May 11, 2004.
As noted in the May 27 RF Report, some cellular operators opposed the Nextel plan, threatening to sue if the decision went against them. The commission too this into account, recognizing that "while it is essential to act promptly in light of the vital public safety interest served by this decision, the parties have raised novel issues regarding appropriations law, and the U.S. Comptroller General has agreed to review those issues. The Commission stated that, should the Comptroller General unambiguously conclude that the Commission's plan violates the appropriations statutes, the Commission will address--either on its own motion or on that of moving parties--whether it is appropriate to stay the effect of some aspects of the plan pending a final decision by the Court of Appeals on any application for review." In addition to covering broadcasters' 2 GHz relocation costs, under the FCC plan, Nextel will have to provide a letter of credit in the amount of $2.5 billion "specifically to ensure adequate funding of relocation costs for other 800 MHz incumbents." It will also have to establish certain escrow accounts to make sure the band reconfiguration process will be completed.
The FCC valued the 1.9 GHz spectrum at $4.8 billion, less the cost of relocating incumbent users. It will also credit Nextel "the value of the spectrum rights that Nextel will relinquish and the actual costs Nextel incurs for to relocate all incumbents in the 800 MHz band." If these cost total less than $4.8 billion, then Nextel will have to make an "anti-windfall payment" to the U.S. Treasury at the end of the relocation process equal to the difference.
While broadcasters weren't specifically mentioned in the FCC news release, if the plan the FCC adopted matches the MSTV, NAB and Nextel proposal, it will offer substantial advantages over the original FCC plan for relocation, which failed to address several issues raised by broadcasters. See RF Report for January 12, 2004. MSTV (Association for Maximum Service Television) clearly recognized this when it issued a statement praising the FCC decision even before the text of the decision was available.
"The decision appears to incorporate the key elements of the relocation and compensation plan filed previously with the FCC by MSTV, Nextel, and NAB," said MSTV President David Donovan. "Accordingly, today's decision establishes an orderly procedure for compensating and relocating local stations from this spectrum. Unlike previous FCC relocation plans, which imposed spectrum constraints and economic limitations on electronic newsgathering, today's decision helps insure that local stations can continue to provide coverage of live local events from remote locations."
Once the FCC releases the text of the decision, I'll have a comparison of the MSTV, Nextel and NAB proposal and the FCC plan in a future edition of RF Report.
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