FCC Agrees to Award Nextel A Slice of Coveted Spectrum
By ANNE MARIE SQUEO and JESSE DRUCKER
Staff Reporters of THE WALL STREET JOURNAL
June 24, 2004
Nextel Communications Inc. won a hard-fought battle with federal regulators when Federal Communications Commission Chairman Michael Powell agreed to give the company a lucrative chunk of telecommunications spectrum in exchange for fixing interference problems with public-safety equipment, people familiar with the matter said.
After nearly three years of negotiations between the company and the FCC, Mr. Powell recommended to the rest of the five-member commission that Nextel be awarded 10 megahertz of spectrum in the 1.9 gigahertz band, highly sought after airwaves where other cellular-phone companies operate, these people said. The company would get this new spectrum in return for turning in existing licenses that have caused interference.
Mr. Powell's office briefed the staffs of the other commissioners, who are expected to unanimously endorse the decision because of the perceived urgency to address the public-safety issue. The deal, according to Nextel's latest proposal, is valued at about $5.4 billion, including how much the company will spend to upgrade public-safety equipment and the value of the spectrum it is turning in to the government to ease congestion, these people said. It is unclear how much, if any, cash the company will pay the government.
A spokeswoman for Nextel, the nation's sixth-largest mobile-phone company, declined to comment.
Firefighters, public safety and other emergency-response agencies have complained that mobile-phone service by Nextel, as well as other cellular providers to a lesser extent, were causing lapses in radio communications, a potentially serious problem when minutes can mean lives.
The resolution could well be held up by almost certain litigation from Nextel's rivals, led by Verizon Wireless, which has waged a bitter lobbying battle to deny Nextel the spectrum licenses it sought. Verizon Wireless and industry trade group Cellular Telecommunications & Internet Association had urged the FCC instead to give the company a less valuable piece of spectrum, quietly suggesting that doing so would avoid their filing a lawsuit. They contend Nextel shouldn't be rewarded with much-sought-after spectrum in a private negotiation with the FCC rather than having to compete for it in a public auction as is customary. |
