[Scan-DC] UPDATE 1-US FCC approves wireless airwaves swap with Nextel

[marcelrf at bellsouth.net]

UPDATE 1-US FCC approves wireless airwaves swap with Nextel
July 08, 2004 12:40:00 PM ET


(Adds details of value of spectrum, windfall data) 

WASHINGTON, July 8 (Reuters) - U.S. communications regulators on 
Thursday approved a plan to give Nextel Communications Inc. (NXTL) 
wireless airwaves it wanted in a swap aimed at ending interference 
with police, fire and rescue communications. 

The Federal Communications Commission voted 5-0 for a plan in which 
Nextel would receive airwaves in the 1.9 Gigahertz band in exchange 
for returning other airwaves, including in the 800 Megahertz band 
where public safety groups operate. 

Legal challenges by the carrier's rivals are expected and a review 
by congressional investigators could delay a final resolution to the 
plan. 

The FCC determined that the airwaves Nextel would receive were worth 
$4.8 billion and the spectrum the No. 6 U.S. carrier is giving up is 
worth about $1.6 billion. 

Nextel will have to establish a $2.5 billion letter of credit to 
cover costs incurred by public safety groups whose operations will 
be reorganized in the 800 MHz band. The agency said it expects the 
company to cover any costs beyond that amount. 

If together the relocation costs, the value of the airwaves it is 
giving up, and credits for relocating its own services is less than 
the $4.8 billion value of the new licenses, Nextel would have to 
make an "anti-windfall payment" to the U.S. Treasury, according FCC 
Wireless Bureau Chief John Muleta. 

Nextel had proposed paying $850 million to cover the costs of 
reorganizing the 800 mhz band and another $512 million to move some 
operations by television broadcasters out of the 1.9 Ghz band. 

Verizon Wireless, the largest U.S. carrier, has indicated it will 
challenge the FCC's decision, arguing the airwaves in the more 
highly prized 1.9 Ghz band should be auctioned to the highest 
bidder. It has already offered to pay at least $5 billion. 

Verizon Wireless, a joint venture of Verizon Communications (VZ) and 
Vodafone Group Plc , had warned the FCC that giving the airwaves to 
Nextel in exchange for money could violate criminal laws. The 
General Accounting Office, the investigative arm of Congress, also 
plans to look into the legalities of the swap. 

Public safety organizations have beseeched regulators to address 
interference with their communications during critical moments by 
commercial wireless services like Nextel. REUTERS > 

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