All five FCC commissioners voted to adopt a new band plan for the 800 MHz band to address the growing problem of interference to public safety radio systems used by emergency responders. The plan will require Nextel to give up rights to certain of its licenses in the 800 MHz band and all of its licenses in the 700 MHz band. In exchange, the Commission will modify Nextel's licenses to provide the right to operate on two five-MHz blocks in a different part of the spectrum -- specifically 1910-1915 MHz and 1990-1995 MHz -- conditioned on Nextel fulfilling certain obligations specified in the Commission's decision.
The FCC determined that the overall value of the 1.9 GHz spectrum rights is $4.8 billion, less the cost of relocating incumbent users. In addition, the Commission concluded that it would credit to Nextel the value of the spectrum rights that Nextel will relinquish and the actual costs Nextel incurs for to relocate all incumbents in the 800 MHz band. To the extent that these combined credits total less than the determined value of the 1.9 GHz spectrum rights, Nextel will make an anti-windfall payment to the United States Department of the Treasury at the conclusion of the relocation process equal to the difference.
The Commission's plan will result in an additional 4.5 MHz of 800 MHz-band spectrum, the equivalent of 90 additional two-way channels, becoming available to public safety, critical infrastructure, and private wireless users, including 10 channels for public safety/critical infrastructure interoperability. As with prior spectrum relocation programs initiated by the Commission, Nextel - as the new entrant into public safety bands - will be required to provide the existing public safety licensees with comparable facilities. To ensure that the band reconfiguration process will be completed, the Commission will require Nextel to establish certain escrow accounts and a letter of credit in the amount of $2.5 billion specifically to ensure adequate funding of relocation costs for other 800 MHz incumbents.
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- Verizon Wireless immediately issued a statement blasting the FCC decision and describing it as a multi-billion dollar windfall for Nextel that bypasses both Congress and the FCC's own spectrum auction process. The company is calling on the General Accounting Office (GAO) to investigate the legality of the deal.
