RealTime IT News

No Hanging Up Spectrum Scrap

Verizon Wireless is decrying a reported attempt by Nextel to reduce the price tag in its controversial spectrum deal with the Federal Communications Commission (FCC).

Nextel's lawyers recently met with FCC staffers to seek clarification of several points regarding the proposal's scheduling and financing, according to Nextel's written summary of those meetings filed with the federal agency.

Analysts at Legg Mason reportedly noted that if Nextel's points are accepted, it could cut the mutli-billion-dollar price tag by between $600 million and $700 million. The research report caused Verizon Wireless to cry foul.

"Nextel appears to be engaged in a post-decisional, yet wholly non-transparent effort to significantly reduce its financial obligations to the U.S. Treasury," R. Michael Senkowski, an attorney representing Verizon Wireless, said in a letter to FCC Chairman Michael Powell.

Verizon Wireless, a joint venture between Verizon Communications and Vodafone , also raised concerns that the issue will not get a proper public airing.

"There can be no serious question that a change with a $600 [million] -- $700 million impact ... must be subject to open and public debate," Senkowski's letter said.

Verizon Wireless and Nextel have been trading barbs for months over the spectrum swap issue.

Nextel occupies space in the 800-megahertz band, sharing the spectrum with police, firefighters and other public emergency agencies. Public safety organizations have complained for the last five years that Nextel's cellular traffic interferes with public safety calls.

Under the FCC plan proposed in July, Nextel would acquire, without competitive bidding, spectrum located at 1.9 gigahertz, which is currently used by public safety agencies and private wireless licensees.

In return, the Reston, Va.-based Nextel will give up the spectrum it presently owns and pay to reconfigure and reband the vacated space for public safety use.

The FCC determined that the overall value of the 1.9 GHz spectrum rights is $4.8 billion. In addition, the FCC said it would credit Nextel with the actual value of the spectrum rights it would give up. Verizon Wireless said it was willing to bid $5 billion for the spectrum in question.

Congress is also investigating the structure of the deal. A spokesman for the FCC was not immediately available for comment on recent discussions with Nextel.