FCC Chairman Backs Nextel Spectrum Bid

The on-again, off-again saga of Nextel Communications' effort to acquire valuable 1.9-GHz airwaves is on-again, according to the latest press reports. FCC Chairman Michael Powell has now thrown his support behind Nextel's bid for the 1.9-GHz band that Nextel has been seeking for several months.

However, a big question still remains: How much will Nextel have to pay for the spectrum? Estimates range from $850 million to $3 billion-plus.

With Powell behind the measure and two of the remaining four FCC commissioners previously supporting Nextel, the plan is expected to be approved soon, according to reports by The Washington Post and Reuters.

"We have been focused on this problem from one perspective--how to fix the interference problem for public safety," Powell said in an interview Wednesday on CNBC. "And to do it in a way that doesn't provide an excessive windfall to any one company, but gets the problem solved. We believe we have come close to figuring out how to do that and we'll get that decision out to the market soon." Some sources said the issue could be voted on by FCC commissioners as early as Friday.

No one questions the necessity for Nextel to move away from the hodge-podge of airwaves it cobbled together since its founding in the late 1980s--its service constantly interferes with public-safety channels used by police, fire, and rescue agencies. Nextel offered to pay more than $1 billion to shuffle various users around spectrum bands, with an eye to picking up bandwidth in the 1.9-GHz spectrum for itself.The 1.9-GHz band features propagation rates that are better than, for instance, the 2.1-GHz band that Nextel's cell-phone competitors have been suggesting Nextel be awarded. The 1.9-GHz band needs a minimum of power and cell towers to operate effectively.

Nextel's competitors--led by Verizon Wireless and Cingular Wireless--have lobbied vigorously against Nextel, arguing that the valuable spectrum should be sold at a public auction and not awarded gratuitously to Nextel. As is the nature of many important telecommunications issues that come before the FCC, any decision in the matter is expected to be challenged in court.

Public-safety organizations weighed in on the controversy Thursday, some supporting Nextel, others opposing it. One group that has supported the so-called Consensus Plan for years is lined up behind an approach that would move some public-safety wavelengths around to accommodate Nextel. That group has generally supported Nextel's plan. A new group called The First Response Coalition is opposing what it calls "a Nextel spectrum-grab scheme now being considered by the Federal Communications Commission."