Subject: [NEXTEL-1] UPDATE 1-US FCC approves wireless airwaves swap with Nextel

From: [email-masked]
Date: Thu, 08 Jul 2004 13:19:20 -0400

UPDATE 1-US FCC approves wireless airwaves swap with Nextel
July 08, 2004 12:40:00 PM ET

(Adds details of value of spectrum, windfall data)

WASHINGTON, July 8 (Reuters) - U.S. communications regulators on
Thursday approved a plan to give Nextel Communications Inc. (NXTL)
wireless airwaves it wanted in a swap aimed at ending interference
with police, fire and rescue communications.

The Federal Communications Commission voted 5-0 for a plan in which
Nextel would receive airwaves in the 1.9 Gigahertz band in exchange
for returning other airwaves, including in the 800 Megahertz band
where public safety groups operate.

Legal challenges by the carrier's rivals are expected and a review
by congressional investigators could delay a final resolution to the
plan.

The FCC determined that the airwaves Nextel would receive were worth
$4.8 billion and the spectrum the No. 6 U.S. carrier is giving up is
worth about $1.6 billion.

Nextel will have to establish a $2.5 billion letter of credit to
cover costs incurred by public safety groups whose operations will
be reorganized in the 800 MHz band. The agency said it expects the
company to cover any costs beyond that amount.

If together the relocation costs, the value of the airwaves it is
giving up, and credits for relocating its own services is less than
the $4.8 billion value of the new licenses, Nextel would have to
make an "anti-windfall payment" to the U.S. Treasury, according FCC
Wireless Bureau Chief John Muleta.

Nextel had proposed paying $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.

Verizon Wireless, the largest U.S. carrier, has indicated it will
challenge the FCC's decision, arguing the airwaves in the more
highly prized 1.9 Ghz band should be auctioned to the highest
bidder. It has already offered to pay at least $5 billion.

Verizon Wireless, a joint venture of Verizon Communications (VZ) and
Vodafone Group Plc , had warned the FCC that giving the airwaves to
Nextel in exchange for money could violate criminal laws. The
General Accounting Office, the investigative arm of Congress, also
plans to look into the legalities of the swap.

Public safety organizations have beseeched regulators to address
interference with their communications during critical moments by
commercial wireless services like Nextel.

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