Make Room for Nextel

After a hefty period of rumination, the FCC this week unanimously approved a plan to let Nextel move into the 2 GHz band. The decision comes nearly three years after the Reston, Va.-based cell-phone service provider proposed the move, which was precipitated by interference with public safety communications.

The plan calls for Nextel to move its operations from the 700 and 800 MHz band into the lower two channels of the 2 GHz spectrum used by broadcasters for ENG. Accordingly, Nextel would be required to put up $2.5 billion to relocate incumbents in the spectrum it abandons as well as for broadcasters bumped out of their broadcast auxiliary spectrum (BAS) at 2 GHz. Specifically, the plan allows Nextel two 5 MHz blocks of spectrum at 1990-1915 MHz and 1990-1995 MHz.

The NAB and MSTV have blessed the plan, in part because broadcasters who lose their BAS channels stand a chance of getting reimbursed for ENG equipment that has to be retuned or posted on eBay. Under the 2GHz reallocation plan adopted by the FCC last November, broadcasters have to jump through several hoops within an allotted period of time in order to request reimbursement.

Nextel has three years to get the job done. An independent Transition Administrator will be appointed to dole out the bucks for band reconfiguration, and should Nextel go belly-up, the Transition Administrator would take over the $2.5 billion relocation pot.

According to the FCC, the plan frees up 4.5 MHz of the 800 MHz band, leaving room for an additional 90 two-way channels for law enforcement, firefighters and the like.

FCC Chairman Michael Powell, as well as Commissioners Kathleen Abernathy, Michael Copps and Jonathan Adelstein all issued statements to the effect of, "boy, are we ever glad that's off the table."

But wait. There's more

Nextel is getting prime spectrum out of the deal, and Verizon, for one, doesn't like it.

"Instead of seeking a lawful appropriation from Congress to finance the work of untangling public safety's frequencies from Nextel's interference, the FCC has pushed ahead, while serious legal questions raised by senior Congressional leaders remain unanswered," Verizon responded in a statement. "Has the FCC financed this project illegally by bypassing both the Congress and the auction process? Is the award of billions of dollars worth of prime spectrum to a private commercial service provider prohibited by federal law?"

The FCC set the value of the 2 GHz spectrum that Nextel gets at $4.8 billion. If Nextel's relocation expenses, plus the value of the spectrum it abandons - around $1.6 billion - don't equal or exceed that amount, or Nextel has to cough up the difference for the Treasury.

Yet there's more still.

Verizon has already offered $5 billion for the slots, giving the cell-phone service behemoth a nice little serving of legal ammo for its expected lawsuit. And the Government Accounting Office said it would investigate the legality of such a transfer of spectrum in the days before the FCC's endorsement.

No stranger to legal challenges to just about everything he utters, Chairman Powell issued a second statement, reminding folks on Capitol Hill just who the FCC was playing to:

"Yes, we admit, there are risks in the action we take today. But they seem to me to pale in comparison to the risks that our first responders face each and every day. This crystal clear fact demands that the government rise above the normal battles of commercial self-interests and simply find a solution. An enormous amount of time and commitment has been spent on valuations; the nickel and diming of what things are worth. But you cannot put a dollar value on the life of the men and women who wear the shield."