Sprint Nextel to Go to Wire on Bid for AWS Spectrum
Sprint-Nextel may pursue spectrum in the June advanced wireless services (AWS) auction but won’t decide until time nears for short-form bid applications, Senior Vp Bob Foosaner said. The combined firm’s spectrum position is so strong the critical issue isn’t licenses, Foosaner said. He also fired back at critics who claim Nextel overpaid for spectrum as part of the 800 MHz rebanding, and he questioned the likelihood of significant telecom legislation passing this year.
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“We are the most spectrum-rich company in America,” he said: “The final decision will be made midnight the night we have to file. There’s no final decision that’s been made. Our spectrum is very superior to anyone else’s…. Everybody would like to have some fill-in spectrum in some places. We just have less need than anybody else.”
Sprint Nextel is years from deciding on a bid for 700 MHz spectrum, to be made available as part of the DTV transition, he said: “It’s too far away. It has wonderful propagation characteristics. It is very close on the spectrum to where our iDEN [service] is. We certainly want to review it.” Even without AWS spectrum or 700 MHz spectrum, Sprint is the only U.S. carrier with enough spectrum to offer streaming video and 4G, Foosaner said.
As part of the FCC’s landmark 800 MHz rebanding order, Nextel, pre-Sprint merger, agreed to pay $4.8 billion in cash and contributed spectrum in return for a nationwide 10 MHz license at 1.9 GHz. Speculation since has centered on whether Nextel overpaid. That remains to be seen, but AWS auction prices won’t be a fair gauge, Foosaner said: “We get 1.9 GHz spectrum that’s immediately adjacent [to spectrum Sprint has], where equipment is available. When you look at 1.7 GHz, what happens in the AWS auction, there’s no equipment available. They can’t leverage off of what’s there.” He said $2 billion of the price was for spectrum Nextel contributed. “Are people also saying we got over- valued for spectrum we turned in?” he asked.
The FCC order solved a problem Nextel had for years -- gripes that its 800 MHz service interfered with public safety radios, Foosaner said. “We're correcting a problem that we would have had to have corrected anyway,” he said: “What cost can you put on that?” Asked if the Sprint merger was even possible if the 800 MHz issues hadn’t been resolved, he said: “I have no idea. I was on one side of the equation. I don’t know what was on the mind of the other side.”
Of the likelihood Congress will pass a major telecom bill this year, Foosaner said he sees little hope, especially since 2006 is an election year. “There’s less than 40 legislative days left,” he said: “Right now, the Senate has no draft. The House has a draft that seems to be focusing on carrying out what 2 companies [AT&T and Verizon] want to hurt cable companies. That seems to be where it is.”
On Foosaner’s wish list is a law reforming telecom firms’ tax status. “The industry is taxed 2nd to tobacco and above alcohol, which is ridiculous,” he said: “We don’t contribute to delinquency or health problems in America.” The FCC should limit state regulation of wireless, he said: “We're concerned that there would be 50 sets of regulation versus one set.”
Congress should scrutinize the prices Sprint and similar firms pay for special access, he said. “Companies including us pay out $15 billion [per year],” he said: “But 83 cents out of every dollar goes to 3 companies, Verizon, AT&T and BellSouth, soon to be 2 companies. The rates of return average 32-82%. That’s a market failure.” -- Howard Buskirk
CTIA Notebook…
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