FCC Gives Nextel More Spectrum Credits

The Federal Communications Commission (FCC) has increased the value of
spectrum that Nextel is exchanging with the government
by $452 million, the agency announced Wednesday.

In July, the regulatory agency approved a spectrum swap with the wireless
carrier to alleviate congestion of airwaves used by police and fire
departments.

Under the pact, Nextel will license 10 megahertz of contiguous spectrum at
1.9 gigahertz currently used by public safety agencies and private wireless
licensees. Those users will be relocated to a portion of the 800 megahertz
band that will be turned over from Nextel.

In return, Nextel was to receive approximately $1.6 billion in credits to
help pay for its airwaves relocation. But Nextel lobbied that the fair
value was higher, resulting in yesterday’s order assessing the space at $2
billion.

FCC commissioners have been anxious to make progress on the issue, but at
least one was displeased with the way yesterday’s decision was reached.

“I am uncomfortable [with] the decision to change the valuation of Nextel’s
spectrum by close to half a billion dollars — an increase of nearly twenty percent,” Commissioner Michael J. Copps said in a statement. “While I believe that Nextel has demonstrated that its spectrum holdings are different than the assumption we made in the original order, I am concerned that the process that the Commission has used here to determine value has become too imprecise.”

The valuation bump is the latest in a contentious process. At one point, Nextel rival Verizon Wireless denounced the deal. Verizon subsequently dropped
its objection after reaching a deal with Nextel.