Nextel Takes Rebanding Decision to the Wire
With a deadline fast approaching, Nextel has yet to say whether it will accept the FCC’s 800 MHz rebanding order. The carrier has until the close of business Feb. 7, which is less than 2 weeks away. In another important approaching deadline the Transition 800 MHz Transition Administrator (TA) has to send to the FCC by the end of Jan. 31 its plan for how reconfiguration should be completed, including which markets should go first.
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Also on the 800 MHz plan, the TA this week filed documents explaining how consultant firm BearingPoint, selected as the lead group in administering the plan, will structure its relationship with Nextel. A complicating factor is that BearingPoint already advises Nextel on other issues, the firm said in a filing. The issue is potentially touchy since BearingPoint is supposed to be a neutral arbiter if public safety or other groups question various aspects of the multi-billion dollar plan. BearingPoint disclosed it did $31.7 million in “non-TA” business with Nextel last year.
BearingPoint said it will maintain a “firewall” between its communications and content division, which otherwise advises Nextel on various issues and its public services division, which will deal with the rebanding. The plan specifies that within the company TA team members may discuss the plan only with others in public services. The BearingPoint project mgr. and Nextel account managing dir. are required to report any conflict of interest. One source noted that ties may not be surprising given the huge size of BearingPoint. The FCC-appointed group that selected the TA specifically looked for a large firm to administer the program. BearingPoint made its relationship with Nextel clear before it was awarded the contract, said Robert Kelly, counsel to the TA.
Nextel had no comment on the rebanding plan except that a decision will be forthcoming by the deadline. The FCC agreed to the 800 MHz plan in July and the order was released a month later. In Dec. the FCC effectively sweetened the pot, giving Nextel $452 million in additional credits for the spectrum it will have to turn in as part of the plan (CD Dec 27 p1). The 800 MHz order was widely hailed last week as one of the biggest accomplishments of Chmn. Powell’s term as chairman.
“The public safety community and others have been moving forward with the assumption that Nextel will say yes,” said a public safety official.
Carrier sources who originally opposed giving Nextel 1.9 GHz spectrum, but have since come to accept the plan, said Wed. they have heard virtually nothing in recent months from Nextel. The sources said they expect Nextel to accept, especially after Dec.’s decision by the FCC.
“I am sure they're going to go forward with it,” said a top carrier source. “I don’t know how they can back out of it and I don’t know how the FCC can let them back down.” The source said he was surprised that Nextel has yet to announce whether it would accept the terms. “I don’t know what the hold up is,” the source added. “Even with certainty this thing is going to be a nightmare to implement, administer and resolve the conflicts that will emerge.”
“Nothing in this proceeding surprises me about how long it takes,” said a 2nd carrier source. “I think we all assume they'll accept it. I'm sure they had to figure out how it fit in with a potential merger with Sprint.” An attorney for the TA said the group was actively working to complete the plan by next week’s deadline.