[opendtv] News: FCC Likely to Reach Unanimous Decision On Nextel Spectrum
- From: Craig Birkmaier <craig@xxxxxxxxx>
- To: OpenDTV Mail List <opendtv@xxxxxxxxxxxxx>
- Date: Wed, 19 May 2004 09:00:39 -0400
FCC Likely to Reach Unanimous Decision On Nextel Spectrum
By MARK WIGFIELD
DOW JONES NEWSWIRES
May 18, 2004 8:46 p.m.
WASHINGTON -- Federal Communications Commission Chairman Michael
Powell is likely to get unanimous support from his fellow
commissioners on a tough decision affecting wireless provider Nextel
Communications Inc.
FCC commissioners appear willing to follow Mr. Powell's lead on how
best to eliminate Nextel's growing problem of creating interference
with critical public-safety radio, according to several people
familiar with matter.
One reason for the support is the decision raises none of the
ideological flags that have divided the FCC in the past, but is
purely a commercial matter. A decision hasn't been finalized.
But Mr. Powell's real problem comes from the wireless industry
itself, which has been united against a solution proposed by Nextel
-- a solution whose outlines gained traction at the agency. Any plan
deemed to give one side an advantage is bound to be greeted by
lawsuits.
A decision has been anticipated at the agency for months, but Mr.
Powell has been willing to wait so that the companies can come closer
to a consensus.
The problem the commission is trying to solve is that the spectrum
Nextel uses to carry its phone calls is mingled with that used by
police, fire and other emergency response radios. The result:
Mobile-phone conversations interfere with emergency radio.
Nextel more than two years ago floated a plan to segregate the
wireless and public-safety uses in the 800-megahertz band.
The company proposed paying some $850 million to move public-safety
radio transmitters to the lower portion of the band, and giving up
some its airwaves. In return, Nextel wants 10 MHz of spectrum in the
1.9-gigahertz band -- the band used by the majority of wireless
carriers.
That plan has been bitterly opposed as a spectrum grab by the rest of
the industry through its trade association, the Cellular
Telecommunications and Internet Association, or CTIA. The spectrum in
the 1.9-GHz band represents the last large chunk of clear spectrum
covering the entire nation.
It is seen as so valuable for wireless voice and data that Verizon
Wireless, a partnership between Vodafone Group PLC and Verizon
Communications Inc., told the FCC it would pay at least $5 billion
for the airwaves. Verizon Wireless has been lobbying heavily against
Nextel.
The CTIA says Nextel should get the extra spectrum it needs in a
slightly different neighborhood, the less-valuable 2.1-GHz band. But
the trade association has moved far from its original position, which
originally called for Nextel to simply restructure the 800-MHz band
without any new spectrum.
Now the pressure seems to be on Nextel. Both Mr. Powell and fellow
Republican Kathleen Abernathy have expressed interest in providing
spectrum for Nextel in the 2.1-GHz band -- a move Nextel bitterly
opposes.
The company argues that calls don't carry as well at 2.1 GHz. Nextel
says it would have to special-order chips and transistors for its
handsets, rather than buy off-the-shelf components widely used by
1.9-GHz equipment.
Nextel also notes that its wireless competitors already occupy parts
of the 2.1-GHz band with so-called microwave links that transport
bulk cellphone traffic to telephone networks. The links would have to
be relocated, "giving Nextel's competitors the opportunity to
directly affect the cost of and time it takes to clear this
spectrum," the company told the FCC in a filing.
But one analyst is puzzled by Nextel's continued opposition to the
2.1-GHz compromise.
"Maybe there is a 5% difference in the fundamental propagation
characteristics' between 1.9 and 2.1 GHz, says Charles Jackson, a
telecom industry consultant, electrical engineering professor at
George Washington University, and former FCC official who worked on
spectrum issues.
Mr. Jackson also says production costs for 2.1-GHz handsets "should
be very, very close" to 1.9-GHz phones. He questioned whether
Nextel's position was simply a bargaining posture.
Another spectrum consultant, Peter Cramton who runs an auction
service called the Spectrum Exchange, says moving the microwave
incumbents in 2.1 "is not a big deal."
"There are rules in place for relocation," says Mr. Cramton, who also
is an economist at the University of Maryland. "It's very do-able."
Nextel spokesman Tim O'Regan, says the company's complaints are real.
"It is not any one particular thing" about 2.1 GHz, says Mr. O'Regan.
"It's an accumulation of things that make 2.1 undesirable, and 1.9 a
much better fit."
Wireless analyst George Dellinger of the firm Washington Analysis
agrees there are disadvantages for Nextel at 2.1 GHz. And he believes
the company's willingness to both move its 800-MHz operations to
eliminate interference and pick up the tab for moving the public
safety community puts it in a powerful position at the FCC.
"I've been saying that Wall Street underestimates the premium the FCC
puts on public safety, and underestimates the position Nextel is in,"
Mr. Dellinger says. "The government needs Nextel more than Nextel
needs the government."
The FCC continues to work through a number of technical issues in the
matter, including valuation of spectrum in both frequencies.
Write to Mark Wigfield at mark.wigfield@xxxxxxxxxxxx
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