Subject: [NEXTEL-1] Analyst: 800 MHz decision imminent

From: Marcelrf <[email-masked]>
Date: Fri, 02 Apr 2004 23:04:50 -0500

Analyst: 800 MHz decision imminent

By Donny Jackson

IWCE/MRT
April 2, 2004

Federal Communications Commission officials are expected to decide how
to resolve interference created by commercial wireless carrier Nextel
Communications in the 800 MHz public-safety band during the FCC's April
15 meeting, if not sooner, according to one analyst.

Rudy Baca, wireless strategist for Precursor Group and a former employee
of the FCC's Wireless Bureau, said the FCC's April meeting is a
"backstop" for a ruling, but there is a very good chance that the
decision will be made on a circulation basis prior to the open meeting.

"The White House said, 'This is a priority,' so it's going to get done,"
Baca said.
A draft ruling being circulated among commissioners is based largely on
the Consensus Plan, which calls for rebanding within the 800 MHz
frequencies and Nextel getting 10 MHz of spectrum at 1.9 GHz. In return,
Nextel has said it would pay $850 million to fund the retuning of the
radios for the entities that would be moved.
Baca said his sources indicate Nextel will have to pay for the 1.9 GHz
spectrum - at a cost between $3 billion and $7.2 billion, in addition to
Nextel's $850 million commitment to pay for retuning, he said.

However, Verizon Wireless and other commercial wireless operators have
long contended that the law requires the spectrum at 1.9 GHz to be
auctioned, and "I don't know how the FCC gets around that," Baca said.

With this in mind, there's little doubt the issue will be taken to
court. In fact, Baca recently wrote a report that states it "is highly
likely (75%) the reviewing court will overturn the FCC's decision and
require an auction." In addition to legal questions, Congress will apply
considerable pressure for an auction, the proceeds of which would help
address federal budget issues, Baca said.

The fear for public-safety officials has been that the 800 MHz issues
would be dragged into litigation as well, which could delay rebanding
for at least an additional year. Baca said he doubts that will occur;
instead, he believes any judges hearing the case will separate the
issues - allowing the 800 MHz rebanding to proceed while presiding over
the 1.9 GHz debate.

"God forbid, if we have another 9/11, no judge wants the story to say,
'Judge So-and-So blocked a plan that would have solved the interference
problems,'" that resulted in people dying during such a tragedy, Baca
said.
However, that scenario is "net bad news" for Nextel, which likely would
remain responsible for paying at least $850 million for 800 MHz
rebanding without knowing whether it would ever receive 1.9 GHz
airwaves, Baca said.
That prospect makes the deal much less attractive for Nextel, which had
hoped to receive 1.9 GHz spectrum at no extra cost to roll out its
Flarion high-data-rate technology to compete with the 3G services being
offered by its competitors.

Placing a short-term value on the proposed deal is difficult, but
placing a long-term value is even more difficult.

Although Nextel has one of the most attractive customer bases in the
industry, the company has never been a serious consolidation target,
because its interleaved 800 MHz spectrum is almost useless to other
wireless carriers.

If Nextel can reach a deal that would give it contiguous spectrum at 800
MHz and 1.9 GHz, expect several suitors to make bids to buy the wireless
carrier in upcoming years, Baca said.

"I've thought Nextel's been dressing itself up for the takeout prom for
some time now," he said. "If they could get cleaned-up spectrum at 800
MHz, keep its push-to-talk - something the others can't match - and have
some spectrum at 1.9 GHz, then Nextel starts looking pretty."

Source: http://iwce-mrt.com/ar/radio_analyst_mhz_decision/index.htm

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