Even if the FCC gives Nextel spectrum, at a price, at 1.9 GHz in ...

Precursor Group said. In a note to investors last week, Legg Mason ranked the probability of a judicial challenge as “high” if the FCC gives Nextel exclusive use of spectrum at 1.9 GHz for a price instead of holding an auction. A staff item is now on circulation on the 8th floor that would retune incumbents at 800 MHz and give Nextel 10 MHz at 1.9 GHz for a price. Nextel also would pay for the costs of retuning public safety and private wireless incumbents at 800 MHz. “If, as we suspect, the FCC sells Nextel exclusive use of the higher- band spectrum instead of putting it up for auction, Nextel’s access to the spectrum is nonetheless likely to be limited due to high litigation risk,” the Precursor Group said. The FCC also is likely to hold Nextel responsible for funding the public safety transition in the short-term even if the carrier can’t access 1.9 GHz until the court appeal plays out in the long-term, the firm said. “The Bush Administration has made it clear to the FCC that this is an issue of first priority for homeland security,” Precursor said. “Nextel’s goal is not only to eliminate ongoing financial and technical responsibility for ‘curing’ interference its commercial operations cause to high priority public safety, but, more importantly, to increase the efficiency and footprint of its spectrum holdings at 800 MHz and 1.9 GHz.” Nextel has spectrum at 1.9 GHz in some southern rural markets acquired from bankrupt Nucentrix. But it needs the full 10 MHz nationwide to roll out its high data rate platform via the Flarion technology, the group said. Precursor said Nextel isn’t likely to be able to add to its 1.9 GHz holdings without paying a multi-billion dollar figure to the govt. “Precursor believes this FCC decision is ‘net’ bad news for Nextel, which is likely further compounded by the time delay and uncertainty of a judicial challenge.”