Subject: [NEXTEL-1] Verizon, Nextel Continue Battle Over Spectrum

From: [email-masked]
Date: Mon, 12 Apr 2004 11:57:37 -0400

Verizon, Nextel Continue Battle Over Spectrum
Verizon bids $5B to block Nextel
By W. David Gardner, TechWeb News

8:25 AM EST Mon., Apr. 12, 2004

The wireless spectrum war is intensifying. Nextel
Communications and Verizon Wireless are battling
over the 1.9-GHz band, while many public-safety
organizations continue to back a proposal that would
reshuffle most of Nextel's traffic into the upper end of
the 800-MHz spectrum.

With the Federal Communications Commission
considering a vote at an Open Commission Meeting
this Thursday, Verizon Wireless has complicated an
already complicated situation by stating it will start off
an auction for the spectrum with a $5 billion bid. The
current proposal has Nextel picking up 10 MHz of
1.9-GHz spectrum without going through an auction.

In a letter to the FCC, Verizon's vice president of
Business Development, stated: "The fact the 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. The
only proper action for the 1.9-GHz spectrum is to auction it to the
highest bidder."

The issue revolves around growing interference problems plaguing the
country's
public-safely radio channels. Nextel operates primarily in the 800-MHz
band, along
with most of the nation's public-safety organizations-mainly police and
fire
departments--and Nextel has been identified as creating the most
interference.

"The core problem is Nextel, and to some extent some others," said Bob
Gurss of
the Association of Public Safety Communications Officials, in an
interview. "Nextel's
architecture intermixes with public safety [radios]."

Gurss, who is director of legal and government affairs at the
association, said the
association supports the so-called "Consensus Plan" formulated by many
public-safety organizations. The plan would move much of Nextel's
operations to the
upper part of the 800-MHz band "in contiguous spectrum and not
intermixed with
public-safety channels," he said. Nextel has offered to pay costs
incurred by
public-safety organizations that would need to retune or replace
public-safety radios.

Nextel, whose
spokespeople were not
available for comment,
has offered $850 million
toward that end. Earlier
this week, the
Washington Post
reported that a
three-member majority of
the FCC has decided to
approve the Consensus
Plan, but to compel
Nextel to pay an
additional $1.3 to $1.5
billion.

By offering to start an
auction off at $5 billion,
Verizon has opened up
another channel of
controversy.

Wireless auctions can be expensive. Earlier this year, Verizon
Wireless's partner, Vodafone
Group, bid up the price for AT&T Wireless, in the process causing
competitor
Cingular Wireless to spend about $10 billion more than its initial bid
to acquire AT&T
Wireless. Verizon Communications owns the majority of Verizon Wireless,
and
Vodafone is a substantial minority owner.

Nextel and Verizon Wireless have been engaged in bitter litigation on
other wireless
issues in recent months. In past complaints about Verizon Wireless's
"misrepresentations" about the 1.9-GHz band, Nextel has said: "Contrary
to Verizon
Wireless's flawed assessment that the 1.9-GHz spectrum is valued at $7.2
billion,
the highest bid ever for 10 MHz of spectrum at 1.9 GHz was $3.3 billion
in 1999,
which was never paid. The highest amount ever received by the FCC for 10
MHz of
spectrum at 1.9 GHz was in fact $1 billion."

http://www.crn.com/sections/BreakingNews/dailyarchives.asp?ArticleID=49338

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