CTIA FLOATS COMPROMISE PLAN FOR 800 MHZ PROCEEDING

The proposal marks a shift for wireless carriers that have argued spectrum at 1.9 GHz Nextel would receive in a rebanding proposal should be auctioned. CTIA’s plan would grant Nextel 10 MHz at 2.1 GHz, instead of the 10 MHz at 1.9 GHz that’s part of the “consensus plan” for rebanding 800 MHz. That plan has been backed by public safety groups and Nextel. In a recent filing at the FCC, Nextel argued there’s no record at the FCC backing 2.1 GHz as replacement spectrum. It cited “numerous technical and operational obstacles” that cast doubts on using this spectrum for commercial wireless systems.

CTIA touted the plan as providing a “three-fold” increase in funds for public safety over the consensus plan. Under that plan, Nextel would pay up to $850 million to relocate public safety and private wireless incumbents at 800 MHz. A plan that has been under consideration on the FCC’s 8th floor wouldn’t entail such a cap and would have Nextel pay the difference between the relocation costs and the value of replacement spectrum it would receive. “This proposal ends public safety radio interference in a prescribed period of time, and makes sure the costs of rebanding are completely covered,” Largent said in a statement. “The plan is also legally sustainable, doesn’t put any one company at an advantage and gives Nextel the spectrum it had originally asked for.”

“There is nothing in here for public safety. They don’t advance the public safety interests further,” a Nextel spokeswoman said, calling the plan “astonishing.” She called the proposal “more of the same” and said it addressed the needs of CTIA’s member wireless companies, rather than public safety. “The consensus plan was a plan that was put together with public safety and with private wireless. We are the only wireless company that was interested in finding a solution almost 2 years ago,” she said. The spokeswoman said Nextel found out about the CTIA executive committee meeting to discuss the plan about 24 hours before the conference call occurred. She said the company didn’t participate.

The CTIA plan received approval from an executive committee of the group, despite the opposition that Nextel has voiced to receiving 2.1 GHz as replacement spectrum. A CTIA source said all members of the executive committee were invited to attend the vote, and 15 of the 23 members were on the conference call.

“This is the plan that causes everyone heartache, which means that it’s a step in the right direction” a Verizon Wireless spokesman said. “Everyone in this proceeding has said that it’s about doing what is right for law enforcement and public safety. This is the plan for public safety in spades.”

Specifically the plan would: (1) Require Nextel to pay at least $3 billion into a trust fund for public safety and critical infrastructure licensees to ensure adequate funding. Nextel has said its $850 million funding pledge is based on accurate estimates of how much it would cost to relocate incumbents. (2) Have an independent trustee manage the money and payments. (3) Require Nextel to relocate and pay for public safety licensees before getting its replacement spectrum on a market-by-market basis. Public safety would receive at least $3 billion from Nextel to fund rebanding, would receive an additional 2.5 MHz of spectrum at 800 MHz and contiguous spectrum in the band, CTIA said.

Alan Tilles, a Washington attorney who represents private wireless companies and helped draft the consensus plan, said the details outlined in CTIA’s press release don’t appear to differ much from what the Commission already is considering in the 800 MHz proceeding. As far as 2.1 GHz is concerned for replacement spectrum, he said the negotiations for the consensus plan involved 1.9 GHz. “If that interests Nextel at all, that’s a whole new deal and a whole new plan and a whole new dynamic in terms of the equities and the finances,” he said.

But others said the proposal outlined by CTIA may prove intriguing to the FCC to the extent it signals that wireless carriers wouldn’t challenge a grant of 2.1 GHz spectrum. Verizon Wireless and other carriers have argued that the Communications Act requires the FCC to auction such spectrum. In arguing against any grant of spectrum to Nextel, carriers “have taken a pretty radical position up to this point,” one industry source said.

A wireless industry source said the proposal lined up by CTIA was designed to present a less “legally risky” proposition for the FCC to consider. A proposal the FCC has been mulling would entail Nextel paying the relocation costs for the 800 MHz rebanding and then paying the difference between that and the value of 10 MHz at 1.9 GHz to the U.S. govt. That raises concerns about a “private sale” to Nextel that’s outside the realm of issues tied directly to 800 MHz rebanding. The CTIA proposal is designed as part of an exchange in which the lower value of the 2.1 GHz spectrum is more closely in line with the relocation costs that Nextel would pay into the relocation fund, the source said.

In its letter to the FCC, CTIA said: “While 2.1 GHz spectrum may be somewhat less valuable than the 1.9 GHz spectrum Nextel currently seeks, Nextel has advanced no sound public interest or technical reasons for challenging the grant of spectrum it originally desired. The 2.1 GHz spectrum continues to be viable and technically suitable spectrum for the services and technologies Nextel has indicated it intends to explore in the future.”