Subject: [NEXTEL-1] Yankee Group On NXTL Spectrum-"The best way to value how much it's worth is an auction"

From: [email-masked]
Date: Mon, 12 Apr 2004 02:32:05 -0400

"The best way to value how much it's worth is an auction," said Roger
Entner, the director of the wireless and mobile services practice at the
Yankee Group in Boston. "In most other cases, you are ripping off the
taxpayer or other companies" if the sale is
private, he said.

Verizon tries to halt Nextel spectrum swap
Last modified: April 9, 2004, 5:41 AM PDT
By Ken Belson
The New York Times

Verizon Wireless told the Federal Communications Commission on Thursday
that it would pay at least $5 billion if an
auction were held for unused nationwide spectrum used to carry wireless
calls.

In setting an opening bid for such an auction, the cell phone provider
is trying to head off efforts by Nextel Communications, which
wants to swap some of its existing 800MHz spectrum for the more
efficient and potentially more valuable spectrum that Verizon
Wireless and other wireless carriers use.

Nextel's use of the 800MHz spectrum, much of which was acquired from
two-way radio dispatch services, has made it easier for the
company to offer the popular walkie-talkie cell phone feature known as
"push-to-talk."

But in the last several years, there have been complaints that Nextel's
use of that spectrum interferes with emergency calls by fire
departments and other public safety organizations using the same
spectrum.

The FCC, Nextel and other carriers have been discussing for more than
two years how and whether to remove Nextel from the
800MHz spectrum. Part of the debate is how to value any new spectrum
that the commission allows Nextel to acquire in return for
giving up its existing spectrum space.

In recent discussions, Nextel has offered to spend $850 million to move
its network and to correct interference with emergency
services. It also wants part of the 1.9GHz nationwide spectrum, which
most other carriers use, in exchange for giving up part of its
spectrum.

Verizon Wireless and other carriers say that Nextel's offer is billions
of dollars lower than the value of the spectrum it wants. They have
insisted that any new spectrum be auctioned off, not given to Nextel on
a preferential basis.

"The fact that Nextel has demanded this spectrum as its price for
promising to rectify interference to public safety operations does not
justify the commission's acquiescence in Nextel's demand," wrote Molly
Feldman, vice president for business development at Verizon Wireless, in
a letter Thursday to John Muletta, the chief of the FCC's Wireless
Telecommunications Bureau.

Verizon Wireless argues that Nextel is using the relocation issue as a
way to grab a share of the 1.9-gigahertz spectrum so that it can compete
with other carriers, because the higher spectrum is required to carry
the more advanced third-generation wireless technology.
"This is a holdup, a stickup to offer services they can't offer now in
the current range," said Jeff Nelson, a spokesman for Verizon Wireless,
which is owned by Verizon Communications and the Vodafone Group.

Valuation of the spectrum varies widely, but many analysts said that
Nextel would have to pay several billion dollars more than its
current offer. Verizon Wireless's $5 billion offer sets a floor for the
bidding, which some analysts say is still less than spectrum
would fetch at auction.

"The best way to value how much it's worth is an auction," said Roger
Entner, the director of the wireless and mobile services
practice at the Yankee Group in Boston. "In most other cases, you are
ripping off the taxpayer or other companies" if the sale is
private, he said.

Verizon Wireless, which says the government is obligated to make new
spectrum available to all companies, may turn to the court
to block Nextel's acquisition of the new spectrum if regulators do not
hold an auction. "It would be very difficult not to sue the
government for not abiding to federal law," Nelson of Verizon Wireless
said.

Some at the FCC, however, say they have the authority to assign spectrum
if it is in the public interest. Analysts said the
government considered eliminating the conflict between Nextel and
emergency services as in the public interest.

FCC commissioners were expected to take up the question of Nextel's
spectrum swap as early as next week. But regulators, who
have been working on the issue for more than two years, have not set a
date for deciding the matter, said Lauren Patrich, a
spokeswoman at the commission.

The government has also not decided whether to hold an auction or a
starting bid should an auction be held. The other option is to
allow Nextel to pay for part of its spectrum relocation but also receive
new spectrum in return.

"We've offered to pay for it," said Leigh Horner, a spokeswoman at
Nextel. "But we have to (be) made whole for granting spectrum."

http://news.com.com/2100-1039_3-5188031.html
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