Subject: [NEXTEL-1] Preferred Communication Systems, Inc. On 800 MHz Public Safety Interference

From: Marcelrf <[email-masked]>
Date: Mon, 01 Mar 2004 10:34:57 -0500

THE CONSENSUS PARTIES? PROPOSAL: A THINLY DISGUISED PRIVATE SALE OF
16 MHZ OF CLEAN AND CONTIGUOUS SPECTRUM

"  The Consensus Parties? Proposal is not an exchange of spectrum by
Nextel Communications, Inc.
(Nextel), Nextel Partners, Inc. (Nextel Partners), its corporate
affiliate, and licensees with whom
Nextel has executed a purchase option agreement or a management
agreement (Nextel Control
Group).  Rather, it is a sale of 16 MHz of Clean and Contiguous
Spectrum.

"  This private sale of such Spectrum clearly is established by the
operation of the Consensus Parties
Proposal in numerous EA markets.

"  For the Consensus Parties? Proposal to constitute a ?kHz-for-kHz?
exchange, it must involve a
movement methodology that produces its results separate and apart from
Nextel?s promised
contribution of $850 million.

"  In testing the Consensus Parties? Proposal to determine whether such
a movement methodology
exists?

"  Does EA  and  Site-Licensed Spectrum move as  a  group  to  the
replacement  spectrum?
No.  The  Consensus  Parties?  Proposal  creates  a  new  Non-Cellular
Block  and  Cellular  Block
whereby such licenses are separated.

"  Is the  New  Cellular Block (former  NPSPAC  Channels  and  1.9  GHz
band  spectrum)
allocated based upon the type of license held? No. The Consensus Parties
allocate all of the
new Cellular Block Spectrum to the Nextel Control Group regardless of
the type of Spectrum it
holds  in  a  particular  Economic  Area  (?EA?)  market  and
Non-Nextel  Licensee  move  to  the
Non-Cellular Block regardless of the type of spectrum it holds.

"  Is the new Cellular Block Spectrum allocated  based  upon  how  a
licensee  operates  its
channels?  No.  The  Consensus  Parties  formulate  a  new  Cellular
Deployment  Test,  which  it
applies  only  to  Non-Nextel  Control  group  licensees.    However,
if  a  Non-NCG  EA  licensee
satisfies this new Test, it moves to the Upper 200 Channels beginning
with Channel 401, but on
a geographic ?footprint? basis only.  By contrast, the Nextel Control
Group?s Spectrum moves
on a 1:1 Clean basis to the former NPSPAC Channels and 1.9 GHz band
spectrum.

"  Is  the  new  Cellular  Block  allocated  based  upon how much  800
MHz  band  spectrum  is
held by a particular licensee? No. The Consensus Parties? Proposal fails
to recognize even
EA  market  boundaries  and  allocates  more  ?replacement  spectrum?
to  the  NCG  than  it
previously held in the 800 MHz Band.

"  Are Non-Nextel Control Group licensees ?made whole? as are the Nextel
Control group
licensees?  No.  Under  the  Consensus  Parties?  Proposal,  Nextel?s
700  MHz  Guard  Band  and
900  MHz  SMR  spectrum  is  added  to  the  rebanding  mix  and  ?eats
up?  all  of  the  remaining
available new cellular Block Spectrum thereby leaving nothing for
Non-NCG licensees.

"  At  the  conclusion  of  the  Consensus  Parties?  rebanding,  does
any  Non-Nextel  Control
Group  licensee  hold  spectrum  in  the  former  NPSPAC  Channels
and/or  1.9  GHz  band
spectrum? No.

"  Is  Nextel  the  only  800 MHz  licensee  that  needs  to  be  moved
in  order  to  accommodate
Public Safety licensees? No. Many commercial and private wireless
licensees are present in
the 800 MHz band that are moved under the Consensus Parties? Proposal.

"  Why  aren?t  these  numerous  commercial  licensees  also  moving
to  the  former  NPSPAC
Channels and/or 1.9 GHz band spectrum? The only difference between them
and Nextel is
that they are not promising to contribute up to $850 million to pay the
total relocation costs of
the Consensus Parties? Proposal.

"  Conclusion of the testing is that the Consensus plan fails to
establish a kHz for kHz exchange, but it
does establish that they are asking the Commission allocate new spectrum
to Nextel in exchange for
the promise to pay money.

 http://gullfoss2.fcc.gov/prod/ecfs/retrieve.cgi?native_or_pdf=pdf&id_document=6515783879

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  1
EXECUTIVE SUMMARY

Consensus Parties Proposal

•    Impermissible Discrimination.

•  The Federal Communications Commission  (?FCC?  or  ?Commission?)
lacks  the
authority to adopt the Consensus Parties? movement methodology, which
seeks to
reserve all of the new Cellular Block Spectrum in the current NSPAC and
1.9 GHz
exclusively to Nextel Communications, Inc. while simultaneously
confiscating one
or both of the spectrum rights of the Non-Nextel General Category and
Lower 80
EA  licensees  and  thus  violating  the  Due  Process,  Equal
Protection  and  Takings
Clauses of the Fifth Amendment to the U.S. Constitution and the FCC?s
statutory
obligation  to  maintain  regulatory  parity  and promote diversity of
CMRS license
ownership and competition.

•   Based upon the Consensus Parties? exclusive allocation of the NSPAC
Band and
1.9 GHz band spectrum to Nextel regardless of (1) the general
application of their
movement methodology and (2) its spectrum holdings in a particular EA
market, it
is  clear  that  such  allocation  is  based upon the desired
result?exclusively
allocating Clean and Contiguous Spectrum to Nextel?rather than
modification of
its  spectrum  holdings  pursuant  to  an  exchange on a ?kHz-for-kHz?
basis or as
?replacement  spectrum.?    Such  exclusive  allocation  therefore  is
based  entirely
upon the identity of the licensee rather than upon the identity,
quantity, quality of
the licenses sought to be exchanged.

•  By  contrast,  the  ?replacement  spectrum?  for  the  Non-Nextel
EA  licensees  is
determined by the Consensus Parties? new Cellular Deployment Test that
requires
only Non-Nextel EA licensees to demonstrate  either  that  they
already  have
constructed a cellular network or have obtained a firm financial
commitment to do
so.    If  a  Non-Nextel  EA  licensee  fails  to  satisfy  such  new
burdens  or  conditions
upon its EA licenses, its EA  and  Site-Licensed  Spectrum  is  moved
to  the  Non-
Cellular  Block  and  it  loses  both  of  its  EA-Licensed  Spectrum
rights.  If  such
licensee  satisfies  these  new burdens or conditions upon  its
licenses, its EA and
Site-Licensed  Spectrum  is  moved  to  the  Upper  200  Channels
beginning  with
Channel 401 on a geographic ?footprint? basis only.  As a result, it
loses one of its
EA-Licensed  Spectrum  Rights.    Under  neither  scenario,  do  the
Non-Nextel  EA
licensees receive compensation for the confiscation of their spectrum
rights.

•  By converting the Nextel?s noncontiguous General Category, Lower 80
and
Business  and  Industrial/Land  Transportation  Site-Licensed  Spectrum
into
Contiguous,  geographic  Spectrum  within  the new Cellular Block, the
Consensus
Parties? Proposal not only considerably (1) increases Nextel?s MHz/Pops
quantity
of  Spectrum  but  also  (2)  enhances  the  quality  of  such
Spectrum  by  replacing  it
with Clean and Contiguous Spectrum thereby providing only the Nextel
with both
  2
a  clear  spectrum  and  operating  advantage  moving  forward.    Such
exclusive
qualitative  spectrum  improvement  arguably  not  only  triggers  the
competitive
bidding provisions of Section 309(j) but also violates the FCC?s
statutory mandates
to  maintain  regulatory  parity  and  promote  diversity  of  CMRS
license  ownership
and promote competition.

•  Spectrum Holdings? Assumptions.

•   Nextel?s ?running average? spectrum calculations, which serves as
the basis of the
Consensus Parties? Rebanding Proposal and  is used by them to justify
their
exclusive reservation of NSPAC and 1.9 GHz band to Nextel is (1)
inaccurate, (2)
misleading, (3) misrepresented in several filings by the Consensus
Parties. and (4)
fails to support Nextel?s and the Consensus Parties? argument that such
exclusive
allocation of new Cellular Block spectrum, including 10 MHz of 1.9 GHz
spectrum,  involves a ?kHz-for-kHz? exchange of spectrum or mere
?replacement
spectrum? either on a quantitative, or more importantly, on a
qualitative basis.

•   According  to  Nextel?s  own  spectrum  presentation,  the  Nextel
holds  a  ?running
average? of 17.77 MHz of 800 MHz band spectrum, 3.56 MHz of 900 MHz SMR
spectrum and 3.66 MHz of 700 MHz Guard  Band  spectrum  or  a  total
of  24.99
MHz  of  such  spectrum,  rather  than  the  26.5 MHz represented by the
Consensus
Parties.  Thus the Consensus Plan is just plain ?giving? Nexgtel
spectrum without
any  so-called  exchange.  Nextel  gaining an average of 1 MHz of
spectrum
nationwide,  with  much  more  than  that  in  individual  markets.
Moreover, this
spectrum calculation does not take into account that a considerable
portion of the
Nextel?s spectrum is encumbered and non-contiguous.

•  Allocation of 1.9 GHz Band Spectrum.

•  By allocating to Nextel 10 MHz of 1.9 GHz band spectrum the Consensus
Parties?
Proposal effectively advocates that the Commission approve, not the
modification
of the Nextel?s licenses, but rather a private sale of spectrum in every
EA market
involving only Nextel in exchange for its promise to contribute up to
$850 million
to defray total relocation costs.  Such private sale would be limited to
Nextel even
in  EA  markets  in  which  Preferred,  Southern  or  other  Non-Nextel
EA  licensees
hold  all  or  a  majority  of  the  800  MHz  EA-Licensed  Spectrum,
or  the  800  MHz
General  Category  EA-Licensed  Spectrum.    Such  a  private  sale
cannot  avoid  the
competitive  bidding  provisions  of  Section 309(j) under the guise of
a spectrum
exchange or as mere replacement spectrum.

•  Total Relocation Cost Estimates.

•  The Consensus Parties? total relocation cost estimate is seriously
flawed due to the
use of unverified license data, unrealistically low cost assumptions and
omission of
  3
certain  cost  items.    Furthermore,  there  is  nothing  in  the
Consensus  Plan  that
addresses the logistical feasibility of the massive relocation,
regardless of costs. As
a  result,  the  Consensus  Parties?  Proposal fails to provide
sufficient funding to
cover anything close to the probable costs of implementing the Proposal.

•  Administration.

•  Confidentiality  and  security  concerns  are  created  by
requirement  that  affected
licensees reveal all system information to the Relocation Coordination
Committee
(?RCC?).

•  Timelines in the Consensus Parties? Proposal apply only to Non-Nextel
licensees.
Such  licensees  are  required  to  furnish  all  system  information,
enter  into  a
relocation  agreement  and complete  relocation  within  fixed
timeframes.    No  such
deadlines apply to Nextel.

•  Consensus Parties? Proposal fails to provide for extension of time
deadlines.

•  If the RCC arbitrates disputes, Nextel will have a decided advantage
since it will
be largely controlled by Nextel.

•  Complex  disputes  are  likely  to  arise  when  the  Relocation
Coordination
Committee tries to ?mix? and ?match? EA licensees and site-specific
incumbents
with  potentially  overlapping  ?footprints.?    Disputes  are  likely
to  be  even  more
contentious  for  EA  licensees  who  relocate to the Upper 200 Channels
and are
allocated their old ?footprints? to share with Nextel on a co-primary
basis.

•  Preferred?s Recommended Solutions

•  The FCC should treat  all  General  Category and Lower 80 EA
licensees similarly
with  respect  to  movement  within  the  800  MHz  band  and  fully
protect  their
spectrum rights.

•    The FCC should treat Critical Infrastructure licensees (as defined
in Section
309(j)(2)) similarly to Public Safety licensees with respect to movement
within the
800 MHz band.

•  The FCC should adopt a rebanding methodology that works legally,
practically
and mathematically for all EA licensees in every EA market.

•  All General Category EA licensees would move to the former NPSPAC
Channels
and/or 1.9 GHz on a 1:1 clean basis. This is absolutely necessary and
logical since
the  public  safety  licensees in the current NSPAC band  are  moving
to  (and
displacing) the General Category EA licensees.  Furthermore, under the
Consensus
Plan  Public  Safety  will  be  relocated  in  a  region-by-region
basis, and will not be
  4
required to move unless funding is available, therefore General Category
Licensees
should not move unless public Safety is moving in that region.

•       The  FCC  should  adopt  a  proposal  that  provides  that  all
General  Category  and
Lower 80 EA licensees who (1) forego reimbursement  of  their  own
relocation
costs, and/or (2) promise to contribute funds to defray total relocation
costs and/or,
would be entitled to an allocation of additional 1.9 GHz band spectrum.

http://gullfoss2.fcc.gov/prod/ecfs/retrieve.cgi?native_or_pdf=pdf&id_document=6515783880

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