Subject: [NEXTEL-1] FCC Chief Backs Nextel Plan for Airwaves

From: NEXTEL-1
Date: Wed, 23 Jun 2004 21:25:09 -0400

FCC Chief Backs Nextel Plan for Airwaves

By Jeremy Pelofsky 

WASHINGTON (Reuters) - Federal Communications Commission (news - web 
sites) Chairman Michael Powell plans to offer to Nextel 
Communications Inc. (Nasdaq:NXTL - news) the airwaves the company 
wants, in order to end interference with public safety 
communications in another band, a source close to the matter said on 
Wednesday. 

The No. 6 U.S. wireless carrier has proposed moving some of its 
operations to the 1.9 gigahertz band and giving the FCC (news - web 
sites) some airwaves it holds in the 800 megahertz band for expanded 
use by public safety organizations. 

Police and fire organizations have complained they have difficulties 
communicating in emergency situations because of interference with 
commercial wireless services using 800 Mhz. 

Nextel also has said it would pay $850 million to cover the costs of 
reorganizing the public safety groups and another $512 million to 
move some users in the 1.9 Ghz band. It has offered airwaves in 
other bands as well as part of the swap. 

Powell had flirted with offering space in the 2.1 Ghz band since 
competing wireless carriers opposed giving Nextel airwaves in the 
lower band. The 1.9 Ghz band is the location of most wireless 
services and is considered extremely valuable. 

But Powell has settled on a proposal for Nextel to get 1.9 Ghz 
airwaves and the company would likely have to put up at least $3 
billion in cash and spectrum, more than half likely in cash, the 
source said, declining further identification. 

The money would be used to pay costs like public safety agencies 
buying new equipment to work in the reorganized 800 Mhz band. 

The proposal could be presented as early as Friday to the other four 
FCC commissioners for their review and vote, the source said. FCC 
spokeswoman Lauren Patrich declined to comment. 

"I do think in the next couple weeks at the outside we're likely to 
vote the final conclusion on that," Powell said in an interview on 
cable business channel CNBC. "I don't want to suggest we've reached 
a final decision." 

Nextel spokeswoman Leigh Horner declined to comment. 

Verizon Wireless, the nation's biggest carrier, has said if the FCC 
gave Nextel the 1.9 Ghz airwaves, the matter would likely land in 
court. The company has also demanded the FCC auction the 1.9 Ghz 
airwaves and has offered to start the bidding at $5 billion. 

The deal could face a hurdle in Congress. 

Rep. Jim Nussle, chairman of the U.S. House Budget Committee and an 
Iowa Republican, plans to introduce legislation later this week that 
would require the FCC to auction off all spectrum, a spokesman said. 

"The public owns the airwaves, you just can't give them away," said 
committee spokesman Sean Spicer. 

Nextel's stock moved higher late on Wednesday amid speculation the 
FCC chief planned to back Nextel. Its shares closed up 85 cents, or 
3.27 percent, to $26.81 on Nasdaq. 

Verizon Wireless is a joint venture of Verizon Communications 
(NYSE:VZ - news) and Vodafone Group Plc (VOD.L).

http://www.reuters.com/financeNewsArticle.jhtml?type=bondsNews&storyID=5498578

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