NEXTEL, PUBLIC SAFETY OFFER COMPROMISE 800 MHZ INTERFERENCE PLAN

Foosaner acknowledged that compromise plan came after “hue and cry” that original Nov. proposal generated from entities such as private wireless operators who were relocated under that program without identification of relocation spectrum. While compromise encompasses many of 800 MHz incumbents, Nextel-backed plan still hasn’t won support of 2nd largest specialized mobile radio (SMR) spectrum holder, Southern LINC, cellular operators or United Telecom Council, which represents utility companies. Separate proposals were expected to be filed by Motorola and group that included Cingular Wireless, but they weren’t available at our deadline.

Consensus plan filed by public safety, private wireless groups and Nextel would split 800 MHz band into 2 contiguous blocks of spectrum. Public safety, business/industrial land transportation (B/ILT) and traditional SMR licensees would remain in 20 MHz noncellularized block and Nextel would relocate to 16 MHz cellularized block. Plan would create guard band in noncellularized block at 814-816 and 859-861 MHz for low-power systems and other B/ILT licensees. Industrial Telecommunications Assn. (ITA) said proposal would provide 5-year period during which public safety agencies could acquire remaining channels vacated by Nextel in noncellularized block at 800 MHz. That so-called green-space spectrum could create “significant additional channel capacity” for state and local public safety agencies, group said. Among benefits of revised plan that ITA identified were extent to which it kept private wireless users at 800 MHz and offered additional B/ILT and SMR spectrum to private wireless operators if public safety chose not to acquire all vacated channels at 800 MHz.

Nextel reiterated funding commitment it made in original White Paper -- that it would pay $500 million for funding public safety relocation costs. Foosaner said in conference call hosted by Legg Mason that Nextel would join public safety agencies in seeking federal funding to supplement relocation costs. If costs exceed $500 million, caveat is that it would be up to Nextel if it wanted to retune public safety systems above that figure, he said. “If it chooses not to, public safety doesn’t have to move,” he said: “As of now, Nextel’s complete commitment is $500 million and not a penny more.” Nextel’s original plan called for it to swap 4 MHz of guardband spectrum at 700 MHz, 8 MHz of SMR spectrum in lower noncontiguous channels of 800 MHz and 4 MHz of SMR spectrum at 900 MHz. Nextel then would receive another 16 MHz, including 6 MHz in upper 800 MHz band and two 5 MHz blocks from reserve MSS spectrum at 2.1 GHz.

Under revamped plan, which revises White Paper that public safety agencies but not private wireless providers had agreed to last fall, Nextel would return 4 MHz of spectrum it held in 40 markets in 700 MHz, 4 MHz it owned at 900 MHz and would contribute 2.5 MHz of 18.5 MHz it held at 800 MHz for realigning noncellular systems. Nextel’s 700 MHz guard band holdings would be redesignated for public safety use and its 900 MHz holdings would go toward B/ILT and traditional SMR use. “While the 700 MHz band will be used solely for public safety operations, the 900 MHz band will be used as an incentive for licensees in the 800 MHz band to relocate to 900 MHz, thus offering more spectrum at 800 MHz to public safety licensees,” filing said. Besides Nextel, groups that signed on to compromise included Assn. of Public Safety Communications Officials, International Assn. of Fire Chiefs, National Sheriff’s Assn., American Mobile Telecommunications Assn., Assn. of American Railroads, ITA, PCIA, Aeronautical Radio Inc.

Unlike counterproposal to original Nextel plan submitted by private wireless coalition earlier this year, latest rebanding plan would create 2 pools of licensees instead of 3, with important difference that private wireless and public safety licensees would co-exist in single pool, ITA Pres. Laura Smith said. She said ITA still was working up potential cost relocation estimates and was in discussion with Nextel on level of compensation. “We don’t foresee any of our members moving without compensation,” Smith told us. One sticking point of original Nextel blueprint was that although public safety users would be compensated for relocation, private wireless operators wouldn’t have had similar consideration. “It certainly indicates that the people who are directly impacted are trying to work together,” Smith said. While cellular carriers haven’t signed on to new plan, Smith said they weren’t in category of 800 MHz incumbents that would be affected directly. Southern LINC, which is part of utility giant Southern Co., also hasn’t signed on, although it’s SMR licensee at 800 MHz. “We will continue to talk to them during this whole process,” Smith said. Point of proposals submitted to FCC is that public safety and SMR licensees now are interleaved at 800 MHz, giving rise to cases of increased interference between SMR operators such as Nextel and public safety, particularly in those bands.

“Before the Commission is well over 80% of the licensees at 800 MHz going arm-and-arm to the Commission and saying this is how to resolve it,” Nextel’s Foosaner said. Leading opponent of plan in terms of sheer volume is community of cellular carriers, he said. He cited proposal presented to FCC by Cingular, Southern LINC and others that would entail rebanding that would relocate public safety users to 700 MHz from 800 MHz, requiring legislative changes, including those connected to DTV transition. “That would require legislative changes to occur and would require all new equipment for public safety,” he said. “It would keep them [cellular carriers] in a more advanced competitive position to Nextel.”

Michael Rosenthal, Southern LINC dir.-regulatory affairs, said his concern remained that compromise plan “hasn’t really fully addressed the concerns of all the groups… The plan as we understand it is far from regulatory parity in treatment of Nextel versus other communications carriers.” One early criticism by wireless carriers of original Nextel plan was that its rebanding proposal had amounted to “spectrum grab” for reserve MSS spectrum at 2.1 GHz. “Nextel is trying to make a spectrum grab for spectrum in the 2.1 GHz or 1.9 GHz range,” Rosenthal said. Original plan would have moved operators such as Southern LINC out of band altogether, so updated proposal “is somewhat of an improvement over elimination, although not a big improvement,” he said.

While APCO signed on to compromise plan, it also filed separate comments Wed. that reiterated its support of proposal “as most appropriate path for the Commission to follow.” It cited comments made earlier in proceeding that called on best practices guide to help address interference issues at 800 MHz and for FCC to clarify responsibilities for eliminating interference once it occurs. “We agree that those are necessary steps, but they are far from sufficient to address the overall 800 MHz band interference problem,” APCO said. “For that, a more comprehensive solution, including a new band plan is necessary.” Plan submitted by Nextel and others would eliminate interleaving of channels used by public safety and Nextel’s low-site cellular operations, “largely eliminating the side-band noise problem,” APCO said. Plan also would consolidate low-site cellular operations above 816/861 MHz and move all public safety spectrum to below that point. “The consolidation of public safety between 806-814/851-859 MHz will open the door for equipment design improvements that narrow the range of frequencies capable of producing an interfering intermodulation product into the 806-814/851-859 MHz band,” APCO said.

Legg Mason said in note to investors that two significant obstacles that appeared to remain were: (1) Identifying source of funds to cover total cost of relocation. (2) Continuing strong opposition of commercial wireless carriers to Nextel’s receiving spectrum outside of 800 MHz band. It said that could be ameliorated by Nextel’s seeking spectrum at 1900 MHz instead of original block at 2 GHz that it had sought.