Subject: [NEXTEL-1] Consensus plan fails legal test

From: [email-masked]
Date: Fri, 26 Sep 2003 16:40:18 -0400

Consensus plan fails legal test
September 23, 2003 11:59am

Washington, D.C. Although I appreciate the effort that Mobile Radio Technology has
spent on addressing the issues regarding interference at 800 MHz (“Nextel
Interference Debate Rages On”), your articles missed an extremely important
element of the debate. Despite APCO and Nextel and others' support of their
rebanding proposal, the “consensus” parties have failed to articulate how the
Federal Communications Commission can legally adopt their plan.

No matter how wonderful a plan might be, the FCC can only do those things for
which Congress has provided statutory authority. So, even if the Nextel plan was
the greatest thing since the invention of wireless, the FCC cannot (or should not)
adopt a proposal that is fully contrary to law, including those limitations on the
FCC's authority.

Central to the Nextel plan is a financing proposal that relies on the existence of
an unwritten, private contract between parties that do not exist. That is, the
financing would come from Nextel's voluntary entry into an agreement with an
entity that would be created by a coalition of frequency coordinators and Nextel.
The financing would be secured by using the 10 MHz of spectrum which Nextel wants
as collateral, however, the secured party would be another, as yet, uncreated
entity. The net result is that the FCC is being asked to adopt rules that rely on
financing arising out of a contract that the agency itself cannot enforce.
Said even more simply, the FCC would be rebanding thousands of systems and units
without being able to enforce the financing terms. Said another way, the rules
that Nextel wants are based on Nextel's “scout's honor” and little else. That
isn't rule making. That's roulette.

Nextel argues that if it didn't perform under the yet unwritten agreement, then
the 10 MHz of spectrum might be sold to raise the money that it should have paid.
What Nextel does not include in its proposal is the company's personal guarantee
that even the capped financing will be paid. Instead, Nextel's plan limits the
extent of its liability to the 10 MHz of collateral.
The FCC has considerable authority and discretion in many areas related to
telecommunications, however, the FCC's authority does not extend to enforcement of
private contractual terms. To lawfully adopt a rule or regulatory scheme, the
agency must have the ability to enforce the rule or decision, particularly when
the rule would effect the ability of public safety entities to realize the
presumed advantages of the FCC's decision. Because of these legal problems and
many, many others (which no entity supporting the Nextel plan has even responded
to) many entities, including UTC, CTIA and SBT have opposed the rebanding proposal
as legally defective and extremely risky.

The issue requires tough regulatory choices. But what cannot solve the problem is
unenforceable promises to be contained in an unwritten contract between
non-existent parties operating outside of the jurisdiction of the agency. It is
time for public safety to be heard from, and its opinion should reflect its need
for assurances far greater than those offered by Nextel's legally unsupportable
and unenforceable proposal.

Robert H. Schwaninger Jr.
General counsel
Small Business in Telecommunications

www.hoovers.com

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