Subject: [NEXTEL-1] Article - Will The Numbers Game Bog Down 800 MHz Relief?

From: [email-masked]
Date: Thu, 24 Jun 2004 14:46:47 -0400

-------- Original Message --------
   From: [email-masked]
Subject: Article - Will The Numbers Game Bog Down 800 MHz Relief?

 Wireless Business Forecast - June 16, 2004 - Reprinted WITH
permissionMonths if not weeks ago, Wireless Business Forecast reported
it believed FCC Chairman Michael Powell was on board with
Nextel’s proposed spectrum-for-spectrum swap. However, the
publication found that, despite all comments he’s made to the
contrary, insiders close to the issue now say Powell is wavering,
reluctant to make any kind of a move because he fears that, regardless
of whatever decision the commission makes, his agency will be taken to
court. On that point, he’s probably correct. If the FCC approves
Nextel’s Consensus Plan and allows the carrier to trade some of
its licensed channels for the spectrum it wants in the 1.9 GHz band,
Verizon Wireless, which has been fighting such a payback tooth and nail,
can be expected to sue the FCC. On the other hand, if the commission
rejects the Consensus Plan and tries to force Nextel into accepting
spectrum it doesn’t want in the 2.1 GHz band – that
alternative still is on the table – Nextel’s lawyers will
have a heyday.There seems to be a disconnect between what Verizon
Wireless told the FCC it would be willing to pay for the spectrum Nextel
wants in return for vacating precious 700 MHz, 800 MHz and 900 MHz
space, and what the rest of the industry (including Verizon Wireless, it
appears) believes the spectrum actually is worth. In comments filed with
the commission, Verizon says it would have no problem bidding $5 billion
for the 1.9 GHz block Nextel says it wants as an incentive; it is
interesting to note, however, that no documents backing this up have
been filed by Verizon Wireless or its parent company with the SEC.

Think about this: Verizon just bought 10 megahertz of BTA PCS space from
American Wireless License Group LLC in Arkansas for $7.75 million in
cash. The numbers say Verizon Wireless paid $7.05 per 10 megahertz per
POP for the Arkansas BTAs. If one manipulates the numbers, it could be
said that Verizon Wireless might be willing to spend $2 billion for a
nationwide license, but not $5 billion.

There also are strings attached to Verizon Wireless’ $5 billion
proposal. Before any money changes hands or before an auction is opened
to the industry for the 1.9 GHz properties, Verizon Wireless wants to
make sure that

·The block can be used for a nationwide license,

·It has been completely cleared of other licensees, and

·The auction takes place within a year.

Anyone familiar with the FCC’s auction processes knows that the
chances of fulfillment of any or all of these demands is somewhere
between slim and none. And therein lies the deal-breaker. Nextel
apparently is okay with the fact it will take years to clear the
spectrum. Not only has Nextel said all along that it will create a fund
to help public-safety groups retune their systems without they’re
having to tap their local municipalities for cash,it just decided to
throw in another two megahertz of spectrum, market by market, in the 800
MHz band for public safety to boot. Double your fun.

But always keep in mind that there was little, if any, altruism here.
It’s business, and Nextel is willing to do whatever it takes to
get the spectrum it wants.

(This article, which has been posted with permission, is an abridged
version of a feature that appeared in the June 16 issue of Wireless
Business Forecast. For more on this and other wireless-related issues,
check out our Web site at www.Telecomweb.com)