Subject: [NEXTEL-1] "SCAM PLAN"- Legal Breifs Already Written, Subpoenas Pending- Are You On The "List"?.

From: NEXTEL-1
Date: Mon, 05 Jul 2004 16:31:29 -0400

"SCAM PLAN"- Legal Breifs Already Written, Subpoenas Pending- Are You On The "List"?.

Reuters
Nextel swap faces legal hurdles after FCC move
Monday July 5, 2:59 pm ET 
By Jeremy Pelofsky 

WASHINGTON, July 5 (Reuters) - While U.S. regulators are poised this 
week to approve a swap of wireless licenses sought by Nextel 
Communications Inc. (NasdaqNM:NXTL - News), legal challenges likely 
will delay or could even scuttle it, analysts say.

 Federal Communications Commission, at its monthly open meeting on 
Thursday or possibly sooner, is expected to approve a plan in which 
Nextel would turn in some airwaves it has in the 800 megahertz band 
in exchange for spectrum it wants in the 1.9 gigahertz band, despite 
opposition from rival carriers.

Plus, the No. 6 U.S. wireless carrier has offered to pay to 
reorganize the lower band where police and fire departments also 
operate and have complained that commercial services like Nextel are 
interfering with their emergency communications.

Nextel will likely have to pony up at least $3 billion in cash and 
spectrum to get the new airwaves, one source has told Reuters. 
Analysts expect Nextel to be required to set aside more than $2 
billion in cash to cover transition costs.

While the FCC is expected to approve the swap, Nextel's competitors, 
like Verizon Wireless, are expected to mount a legal challenge, 
arguing the agency lacks authority from Congress to assign the 
wireless airwaves and must auction them instead.

Precursor research firm analyst Rudy Baca said the FCC would likely 
make Nextel help public safety organizations buy new equipment that 
would work in the newly reorganized 800 Mhz band by putting up $3 
billion over three years.

He added that a legal joust was certain: "I think this is going 
immediately to court, the briefs have already been written."

Baca also predicted a federal appeals court will likely issue a stay 
blocking the FCC decision and await a determination of the legalities 
from the U.S. Comptroller General David Walker, whose General 
Accounting Office plans to review the matter.

Verizon Wireless, the biggest U.S. carrier, has engaged in a campaign 
to scuttle the deal, including writing a letter warning FCC officials 
they could face criminal charges and offering to bid $5 billion for 
the 1.9 Ghz airwaves.

"The FCC should be slowing down right now," said Verizon Wireless 
spokesman Jeffrey Nelson. "They should be listening to Congress, 
which seems to have been forgotten, and should be listening to legal 
advisers."

But one agency source indicated that Congress was not likely to get 
involved until the FCC tried to solve it first.

LEGAL ACTION EXPECTED

"If Nextel is awarded 1.9 Ghz spectrum, we expect other industry 
players ... to take legal action," said Prudential Equity Group in a 
note to clients, suggesting Verizon Wireless would file suit.

Wireless licenses in the 1.9 Ghz band are used mostly by commercial 
services like Verizon and the airwaves are considered quite valuable. 
The FCC plans to sell some licenses in that band next year which 
could fetch billions of dollars.

Nextel has already agreed to pay $850 million to cover the costs of 
reorganizing the 800 mhz band and another $512 million to move some 
operations by television broadcasters out of the 1.9 Ghz band.

"If the FCC adopts the consensus plan, we hope that everyone, 
including the opposition, will rally around that decision so public 
safety can have a solution provided to them as quickly as possible," 
said Nextel spokesman Tim O'Regan.

But Congress is starting to take greater interest in the issue, which 
could complicate the matter.

Sen. Frank Lautenberg, a Democrat from New Jersey, where Verizon 
Wireless has headquarters, has received a verbal commitment from the 
GAO to look into whether the FCC's plan would illegally disburse or 
divert money from the U.S. Treasury, the lawmaker's spokesman Alex 
Formuzis said.

No matter the outcome, analysts predicted it would take many months, 
if not longer, for the issue to be resolved and in the end that 
result may be just reorganizing the 800 Mhz band.

"The FCC has been trying to work on this in a way that minimizes the 
legal risk while at the same addressing the public safety issue," 
said Schwab SoundView analyst Paul Glenchur. "I'm guessing it takes 
you into next summer, or maybe a little longer, before it's all done."

He raised the question of whether the court would allow rivals to 
challenge the FCC decision, noting that one could argue they are not 
directly affected by the decision.

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

http://www.reuters.com/newsArticle.jhtml?type=topNews&storyID=5590079

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