Subject: [NEXTEL-1] Nextel, Verizon raise the stakes in 'space' battle

From: Marcelrf <[email-masked]>
Date: Fri, 05 Mar 2004 08:47:14 -0500

EXCLUSIVE REPORTS
From the February 27, 2004
Nextel, Verizon raise the stakes in 'space' battle
Roger Hughlett
Staff Reporter

The federal battle over national airwaves is heating up -- and the
stakes have never been higher.

In the middle of the brawl between giants Nextel Communications and
Verizon Wireless sits a serious issue: ensuring cops and firefighters
don't lose calls because of interference caused by walkie-talkie phones.

Nextel stands to win big if regulators do what the Reston-based company
wants it to do: grant Nextel as much as $8.5 billion worth of airwaves
in exchange for clearing off the airwaves used exclusively by first
responders. Right now, users of Nextel two-way radio phones use the same
airwaves as public safety officials.

If regulators don't go with the company's proposal, however, experts say
Nextel will suffer serious losses on the top and bottom lines.

Being kicked off the airwaves means less space for calls made by Nextel
customers, and that means lost sales. Even if the government gives the
company alternative space to use, experts say Nextel would have to
invest hundreds of millions of dollars in new technologies to provide
service on the new airwaves.

"Nextel is not in good shape," says Ray Jodoin, director of wireless
infrastructure research at Oyster Bay, N.Y.-based ABI Research. "They
can't afford any setbacks. This would be a major one."

The Federal Communications Commission is making major changes to the
rules that control which carriers have access to specific portions of
the public airwaves. The changes are expected by May. Which way the
agency will go, though, is anyone's guess.

The stakes are so high Nextel paid a consulting group founded by former
New York Mayor Rudy Giuliani $5.4 million in stock options to help
persuade the FCC to go with its proposed plan, according to documents
filed with the Securities and Exchange Commission.

Nextel's plan, in a nutshell, is this: The FCC would designate a portion
of the public airwaves -- basically the real estate needed to broadcast
wireless communications -- for public safety use only. The airwaves
Nextel uses for its two-way radio phones would be shifted away from that
space.

Nextel (www.nextel.com) would pay $100 million in cash and extend $750
million in credit to cover the cost of switching police and fire
departments to the new broadcasting frequency.

Public safety officials say $850 million isn't enough to cover the
costs. Nextel contends it is.
Nextel would then get the rights to airwaves that aren't being used by
other wireless carriers or public entities.
The "swap" for rights to new space is what has Verizon up in arms.

"Those rights should be auctioned off," says Don Brittingham, director
of wireless and spectrum policy for Verizon (www.verizonwireless.com).
"They are worth billions, and that money should go to taxpayers."

The rights to airwave frequencies were given to wireless carriers by the
government in 1980s, when the industry was just getting off the ground.
Today, wireless carriers, such as radio and television broadcasters, pay
for the rights.

Verizon officials say the rights Nextel is seeking are worth as much as
$8.5 billion, based on market research conducted by a group paid by
Verizon.

Nextel officials say that's an overestimate of what the rights are
worth. Nextel claims it would lose $1 billion in the swap.
"This is about public safety," says Nextel spokesman Tim O'Regan.

Verizon officials don't dispute that. However, they say Nextel caused
the communications problems for public safety officials, so it shouldn't
gain from changes that are necessary. Both sides and public safety
groups agree that changes are needed and needed quickly.

"There's no question that the interference is caused, in part, by
Nextel," says Laura Smith, CEO of the Industrial Telecommunications
Association (www.ita-relay.com), a trade group representing wireless
carriers.
"I don't think anyone wants to see Nextel benefit from this," says ABI's
Jodoin. "But it needs to be fixed."

http://washington.bizjournals.com/washington/stories/2004/03/01/story5.html?page=1

--
    "NEXTEL-1 IT'S NOT JUST NEXTEL"
  Note The New address
Subscribe to Nextel-1: http://www.groups.yahoo.com/subscribe/NEXTEL-1

  "NEXTEL2 FOR iDEN SOFTWARE DEVELOPERS"
Subscribe to Nextel2: http://www.groups.yahoo.com/subscribe/NEXTEL2

  "WIRELESS FORUM HOMELAND SECURITY GROUP"
     The Complete Resource for Wireless Homeland Security.
Subscribe to WFHSG:  http://www.groups.yahoo.com/subscribe/WFHSG