Subject: [NEXTEL-1] Verizon Wants Nextel Spectrum Relocation Blocked

From: Marcelrf <[email-masked]>
Date: Thu, 26 Feb 2004 16:57:34 -0500

Verizon Wants Nextel Spectrum Relocation Blocked
By Scott Moritz
TheStreet.com Senior Writer
2/26/2004 4:52 PM EST

Verizon Wireless (VZ:NYSE - commentary - research) says it opposes
Nextel's (NXTL:Nasdaq - commentary - research) emergency-radio-band
relocation plan and is calling for regulators to auction the wireless
spectrum instead.
The rapid growth of cellphone services has caused an increase in
interference in the nation's public safety radio frequency. To eliminate
disruption of 800-megahertz emergency communications, the Federal
Communications Commission is considering a proposal from Nextel to
vacate the adjacent 700mhz and 900mhz frequency in exchange for a swath
of higher bandwidth at 1.9 gigahertz.

Nextel has also offered $850 million to pay for
relocation of other interfering operators in the
public safety spectrum.

Other than Verizon Wireless, Nextel has had
little opposition to the plan. But critics and
industry observers say it would be a great
windfall for the No. 5 player, giving it a heaping
supply of network capacity at a relatively low
cost.

Verizon Wireless says the chunk of 1.9ghz
spectrum that Nextel wants is worth $7.2 billion
and should be auctioned rather than given
away.

An FCC representative declined to comment on
the Verizon letter and said that there have been
several analysts' appraisals of the value of the
spectrum that differ with Verizon's figure.

For its part, Nextel says its so-called consensus plan is a fair trade
because it would be giving up valuable spectrum in exchange for a
replacement spectrum.

And though Verizon Wireless is urging the FCC to put the public radio
property up for auction, the company did not promise it would be a
bidder for the radio band. Verizon isn't exactly overburdened with cash
at this time, with more than $40 billion in debt and facing the
potential need to buy out partner Vodafone's (VOD:NYSE - commentary -
research) 45% stake in the joint venture.

Verizon clearly doesn't want to concede any ground to a competitor, and
has managed to get 23 congress members to sign a letter opposing
Nextel's swap proposal.

But recent spectrum auctions have been wholesale disasters as high
bidding didn't always lead to full financing. The last auction winner,
NextWave, filed for Chapter 11 protection and tied up the spectrum
licenses in court for years.
Observers say the FCC wants to clean out the public safety frequency
quickly and at no cost to taxpayers.  While giving Nextel some prime
wireless turf angers rivals, it represents no direct cost to taxpayers
and it achieves the goal of a clear emergency radio band.

The FCC rep declined to make any predictions as to when the agency would
decide, but said that early this year was a safe bet.

http://www.thestreet.com/_yahoo/tech/scottmoritz/10145810.html

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