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FCC Backs Off Nextel Plan for New Spectrum
Competitors Say Swap Would Be a Giveaway

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Nextel Communications Inc.
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_____Nextel Headlines_____
Nextel Lobbies For Bigger Share Of Cellular Space (The Washington Post, May 24, 2004)
Nextel Hits New Setback in Spectrum Bid (The Washington Post, May 20, 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)
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_____FCC In The News_____
Nextel Lobbies For Bigger Share Of Cellular Space (The Washington Post, May 24, 2004)
FCC Asked To Examine A la Carte Cable TV (The Washington Post, May 20, 2004)
The Week Ahead (The Washington Post, May 16, 2004)
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By Yuki Noguchi
Washington Post Staff Writer
Friday, May 21, 2004; Page E01

The Federal Communications Commission has pulled back its approval of a plan backed by Nextel Communications Inc. to secure valuable new airwaves on which to transmit its phone traffic, sources close to the commission said.

Nextel's cellular-phone systems interfere with police and emergency radio systems around the country. To remedy the problem, Nextel proposed giving up some of the airwaves to which it has rights and offered to pay $850 million to move public safety agencies to less-crowded frequencies. In return, it wants the rights to airwaves in the 1.9 gigahertz range.

Nextel's rivals, including Verizon Wireless Inc. and Cingular Wireless LLC, have lobbied against that proposal, claiming that it effectively would 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 that Nextel should pay more and get less-valuable airwaves in the 2.1 gigahertz range.

In early April, after 2 1/2 years of considering various solutions, a majority of the five commissioners, including Chairman Michael K. Powell, voted in favor of Nextel's plan. But the commissioners continued to discuss other options, including whether Nextel should pay more for the airwaves and whether the company should get the less valuable 2.1 gigahertz frequencies. The higher frequency band is considered less desirable because cellular systems don't currently operate there.

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 frequencies it says it will not accept, sources close to the FCC said. Powell's decision appears to signal that a majority of commissioners favor giving Nextel the 2.1 gigahertz spectrum, the sources said.

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

Nextel spokeswoman Leigh Horner declined to comment on nonpublic deliberations at the FCC.

Meanwhile, pressure is mounting on both sides for the FCC to decide. Verizon Wireless has won support from several dozen members of Congress and New York state Attorney General Eliot L. Spitzer. Nextel has the support of the Association of Public Safety Communications Officials and hundreds of local fire and police departments around the country.

Each side has threatened to sue if the FCC does not act in its favor.


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