Subject: [NEXTEL-1] Nextel should play ball

From: NEXTEL-1
Date: Wed, 23 Jun 2004 03:55:01 -0400

Nextel should play ball

By Glenn Bischoff
gbischoff @ primediabusiness.com

Mobile Radio Technology
 June 1, 2004 

In this edition's cover story, Decision Time 
(See http://iwce-mrt.com/ar/radio_decision_time/index.htm) 
MRT Senior Writer Donny Jackson provides in-depth coverage of 
the latest chapter in the 800 MHz interference saga: the Cellular 
Telecommunications & Internet Association's “compromise” proposal 
that would reband the airwaves, generate the money needed to pay 
for the project and prevent Nextel Communications — which is 
causing most of the interference that disrupts public-safety 
communications nationwide — from gaining a competitive advantage.

It's an interesting proposal, and one the Federal Communications
Commission should seriously consider. Under the plan, both Nextel and
its main combatant — Verizon Wireless — would have to budge more than a
little. Nextel would have to agree to pay considerably more than the
$850 million it has pledged to execute the rebanding and accept
replacement spectrum at 2.1 GHz instead of the 1.9 GHz airwaves it
covets. Verizon Wireless would have to back off its assertion that
current telecom law prevents the FCC from awarding spectrum outside an
auction and agree not to litigate a one-time award of the 2.1 GHz
spectrum.

While Verizon Wireless has publicly stated it will play ball, Nextel has
balked. In a letter to FCC Chairman Michael Powell, Nextel CEO Tim
Donahue said accepting the 2.1 GHz spectrum in lieu of the more valuable
1.9 GHz spectrum wouldn't be in the best interests of the company's
shareholders.

No one should blame Donahue for this position. CEOs tend to find it
difficult to hold on to their gigs when they make shareholders angry,
and this is one job Donahue wants to retain, having pulled down a tidy
salary of $26.3 million last year. He also holds 1.8 million shares of
the company's stock and understands intuitively that Wall Street will
react better to a 1.9 GHz award.

But Donahue is taking a short-term view. It's a miracle that a first
responder or civilian hasn't been killed or seriously injured as a
result of 800 MHz interference. A few months ago, the families of 12 New
York City firefighters filed a $5 billion lawsuit alleging their
relatives died because their radios failed to receive evacuation orders
before the World Trade Center towers collapsed. Eventually, a judge
blocked the suit, but only because the families had applied for awards
from the Victim's Compensation Fund; one of the stipulations of
receiving compensation from the fund is a waiver of civil litigation.

Given this, it is a virtual certainty that the survivors of any first
responder(s) killed in the line of duty as a direct result of radio
failure due to 800 MHz interference would file a multimillion-dollar —
perhaps multibillion-dollar — lawsuit against Nextel. I wonder what
Donahue's shareholders would think about that?

© 2004, Primedia Business Magazines and Media, a PRIMEDIA company. 
All rights reserved.  

http://iwce-mrt.com/ar/radio_nextel_play_ball/index.htm

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