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Nextel Says Compromise Won't Work
FCC Considers Swap Of Different Spectrum

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Nextel, FCC in Standoff Over Prime Cellular Spectrum (The Washington Post, May 7, 2004)
Nextel Expands Across Borders (The Washington Post, May 5, 2004)
Nextel Strikes Deal With TV Broadcasters (The Washington Post, May 4, 2004)
Cell-Phone Trade Group Goes Against Nextel (The Washington Post, Apr 30, 2004)
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Nextel, FCC in Standoff Over Prime Cellular Spectrum (The Washington Post, May 7, 2004)
Cell-Phone Trade Group Goes Against Nextel (The Washington Post, Apr 30, 2004)
AT&T to Bid To End Phone Deadlock (The Washington Post, Apr 29, 2004)
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By Yuki Noguchi
Washington Post Staff Writer
Wednesday, May 12, 2004; Page E01

Nextel Communications Inc. yesterday told the Federal Communications Commission it won't accept a compromise being discussed by the commission, which has spent more than two years trying to find a way to minimize cellular call interference with public safety communications.

Fire, police and emergency communications systems have complained of interference from cellular systems. Nextel, which has admitted it causes a majority of the interference problems, has offered to pay $850 million to move some of the public safety users to other airwaves with less interference and to give up some of its existing airwaves. In return, Nextel wants a swath of spectrum in the 1.9 gigahertz range.

Nextel's rivals, led by Verizon Wireless, say that such a swap would be a giveaway of public resources. They have urged the FCC to offer Nextel a slice of less-valuable spectrum in the 2.1 GHz range, something the commission is considering, according to sources close to the FCC.

In a letter sent to the five commissioners, Nextel strongly opposed that proposal. "Nextel cannot and will not accept [the less valuable spectrum] and will avail itself of every possible legal challenge to that outcome," Nextel president and chief executive Timothy M. Donahue wrote.

Paul Saleh, chief financial officer of Nextel, said in an interview that the swap "does not work for us with our technology." At higher frequencies, signals don't travel as far, and existing cellular equipment cannot be used, which is why Nextel won't accept the less-desirable spectrum, Saleh said.

"Our competitors are looking for every single opportunity to disadvantage us," Saleh said. Nextel, like Verizon Wireless and other wireless carriers, needs more capacity to carry phone calls and Internet traffic, making spectrum allocation fights intense.

Nextel said the total value of its payments and exchanged spectrum is $4 billion.

Its rivals have criticized Nextel's plan as too favorable to the Reston-based wireless company, which is the sixth-largest cell phone carrier in the United States.

Verizon Wireless and the Cellular Telecommunications & Internet Association have lobbied the commission and members of Congress to pressure the FCC to give Nextel the less-valuable airwaves in the 2.1 GHz range and to insist on higher payments to cover the cost of the move of public safety users. In recent weeks, various members of Congress and New York state Attorney General Eliot L. Spitzer have sent letters to the commission urging it not to approve Nextel's plan.

Verizon Wireless said it wants the spectrum to be auctioned off and has offered to bid at least $5 billion for the airwaves Nextel wants.

Last week, a majority of commissioners appeared to support offering Nextel the 2.1 GHz spectrum, according to sources close to the commission, who spoke on condition of anonymity. Nextel's rivals have characterized the 2.1 GHz proposal as a compromise.

Geoff Stearn, Nextel's vice president of spectrum resources, said yesterday that Nextel sent the letter because it felt it had to respond to those discussions at the FCC.

The FCC could force Nextel to fix its interference problems with public safety users, but it's unlikely the commission could force Nextel to pay to move public safety groups to different spectrum, according to legal sources close to the FCC, who spoke on condition of anonymity.

Jeffrey Nelson, a Verizon Wireless spokesman, said Nextel's response yesterday proves it is trying to get a cheap deal. "By threatening to walk away from the table if it doesn't get what it wants, Nextel has shown its hand; for Nextel this has always been about dollars and cents, and not about fixing a very real problem for men and women on the police beat."


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