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Nextel Hits New Setback in Spectrum Bid


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Nextel Communications Inc.
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FCC Backs Off Nextel Plan for New Spectrum (The Washington Post, May 21, 2004)
Nextel Says Compromise Won't Work (The Washington Post, May 12, 2004)
Nextel, FCC in Standoff Over Prime Cellular Spectrum (The Washington Post, May 7, 2004)
Nextel Expands Across Borders (The Washington Post, May 5, 2004)
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By Yuki Noguchi
Washington Post Staff Writer
Thursday, May 20, 2004; 6:48 PM

The Federal Communications Commission has pulled back its approval of a plan backed by Nextel Communications Inc., according to sources close to the commission, marking a setback for the Reston-based wireless phone company's efforts to secure valuable new airwaves to transmit its phone traffic.

Nextel's cellular-phone systems interfere with police and emergency radio systems around the country. To remedy the problem, Nextel proposed giving up rights to use some of its existing airwaves and offered to pay $850 million to move public-safety groups to a less-crowded frequency band. In return, it wants the rights to a swath of airwaves at the 1.9 gigahertz range.

Nextel's rivals, including Verizon Wireless and Cingular Wireless, have lobbied hard against that plan, claiming the proposal would effectively give away a scarce public resource that is worth at least $1 billion more than what Nextel offered. Those companies, and the Cellular Telecommunications & Internet Association, have argued Nextel should pay more and get less-valuable airwaves in the 2.1 gigahertz range.

In early April, after two and a half years of considering various solutions, a majority of the five commissioners, including FCC chairman Michael K. Powell, voted in favor of Nextel's plan. But the five commissioners continued to discuss other options, including whether Nextel should pay more for the airwaves, or whether the company should get the less valuable 2.1 gigahertz airwaves. The higher frequency band is considered less desirable because cellular systems don't currently operate there.

Earlier this week, Powell pulled his vote supporting the 1.9 gigahertz exchange, effectively extending negotiations and increasing the possibility that Nextel may be forced to take the less-desirable spectrum that it says it will not accept, according to sources close to the commission. Although all options remain on the table, the move appears to signal that a majority of commissioners back a plan to give Nextel the 2.1 gigahertz spectrum, FCC sources said.

Commissioners Kevin Martin and Michael Copps have voted to support the 1.9 gigahertz proposal.

Nextel spokeswoman Leigh Horner declined to comment on the non-public deliberations at the FCC.

Meanwhile, pressure is mounting on both sides for the FCC to make a decision. Verizon Wireless has garnered support from several dozen members of Congress and New York state attorney general Eliot Spitzer supporting its argument. On the other side, Nextel has the support of the Association of Public-Safety Communications Officials, and hundreds of local fire and police departments around the country.

Both sides have threatened to sue if the FCC does not act in their favor. Home

© 2004 The Washington Post Company

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