VERIZON'S BARR SAYS NEXTEL DECISION COULD BREAK FEDERAL LAWS

Several sources said they were surprised that Barr raised the specter of criminal prosecution. Barr said that while Verizon previously argued that a decision to give Nextel 1.9 GHz spectrum would violate the Communications Act, the FCC may be less familiar with other proscriptions “some of which are criminal in nature.”

“It is no accident that Congress chose to employ the criminal law to police the fiscal accountability of public officials,” Barr wrote. “Congress well understood that stewards of public resources could be exposed to relentless pressures to convert those resources to private gain. It therefore took stern measures, and aimed them directly at the officials themselves, to ensure that they would not succumb to these pressures and instead remain true to the public interest.”

Barr advised Powell that he should consult the Comptroller Gen. on the “lawfulness of the plan” before proceeding. Barr told Powell the “grave legal problems that indisputably exist, the magnitude of the proposed transaction, and the disruption that retroactive invalidation of the Nextel plan would cause” all suggest caution. Barr said giving Nextel “immensely valuable” 1.9 MHz spectrum would be injurious to wireless carriers, “especially Verizon.” One attorney and former regulator said he had never seen a letter assert so blatantly that the Commission could be guilty of a crime.

Powell had hoped to release an order before or even on the July 4th holiday, giving Nextel the 10 MHz it has sought at 1.9 GHz, sources said last week (CD June 24 p1). Officials on both sides of the issue said Tues. the FCC has not indicated definitely when an order will be released. Meanwhile, the fight continued. CTIA, for example, took out a full page ad in The Washington Post Tues. to urge support for the “compromise” plan it supports, as opposed to the “consensus” plan promoted by Nextel.

Nextel said the Barr letter wasn’t a surprise given Verizon’s aggressive tactics opposing its rebanding plan. “Verizon is showing its true colors -- litigation and lobbying are how this company competes,” Nextel said. “Verizon is resorting to scare tactics because it is clear that the FCC has the full authority to adopt the consensus plan and solve the critical problem of public safety radio interference.”

Bob Gurss, gen. counsel of the Assn. of Public Safety Communications Officials, said his members and public safety groups are anxious for a decision. “It’s very frustrating that the opponents keep digging deeper into their bag of tricks to delay FCC action,” Gurss told us. “It seems like as soon as they recover the opponents throw something else in their way. It’s time for the FCC to make a decision.”

On a separate front, the United Telecom Council said electric utilities remain concerned about the spectrum they would receive for emergency communications under the Nextel proposal. UTC said the spectrum at 816-817/861-862 MHz “raises more problems than it solves.”

UTC advised the FCC not to reach a hasty decision: “If political pressures are too great to permit postponing the enormous disruption of rebanding, your decision must ensure continued safe operations for public safety and critical infrastructure licensees. UTC and its members are increasingly concerned that the framework of the Commission’s decision in the 800 MHz proceeding will cause unnecessary and unacceptable harm to critical infrastructure operations.”