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Nextel Says FCC Undervalued Deal

Firm Seeks to Pay Less for Spectrum Swap

By Yuki Noguchi
Washington Post Staff Writer
Thursday, September 23, 2004; Page E05

Nextel Communications Inc. said the Federal Communications Commission should reduce by at least $452 million what it is charging the company for new airwaves.

The FCC is trying to clear up interference between Nextel's cellular towers and police and fire radio systems around the country by exchanging Nextel's old spectrum for clearer airwaves.

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In July, the commission agreed to give Nextel new airwaves that the regulators valued at $4.8 billion. In return, the company would provide a package of equal value by turning in old airwaves worth an estimated $1.6 billion, underwriting the costs of relocating and retuning the public-safety groups, then paying any remaining difference in cash.

In a filing with the FCC late Tuesday, Nextel said the FCC underestimated the reach of its network, and therefore undervalued the airwaves Nextel would give up. Instead of the $1.6 billion in credit that the FCC planned to permit for the old airwaves, the company contends they are worth $740 million more using the commission's own formula. Nextel said the airwaves are worth $452 million more using a formula based on updated, more detailed information.

In previous filings, Nextel had not put a price on the changes it sought in the FCC's offer.

"Nextel wants to get this done. However, there are some ambiguities in this order that need to be clarified in order to get this done," said Tim O'Regan, a spokesman for the company.

The FCC has not indicated whether it plans to reopen the case, issue corrections to its initial decision or reject Nextel's arguments. Lauren Patrich, an FCC spokeswoman, declined comment.

Rival carrier Verizon Wireless has said Congress should require an auction of the airwaves Nextel wants, then use the proceeds to clear up the interference problems for public-safety communications.

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