FCC Awards New Wireless Spectrum To Nextel

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July 08, 2004 (1:01 PM EDT)

As expected the FCC Thursday approved a plan that will give Nextel Communications a 10 megahertz chunk of spectrum in the 1.9 GHz band. Also, as expected, the 5-0 vote touched off a protest by a public safety group that is expected to be followed up by complaints from additional protesting parties.

FCC spectrum decisions are often accompanied by litigation and the Nextel spectrum case has been particularly contentious. One public safety organization called the First Response Coalition issued a press release a few hours after the FCC decision, calling upon "the courts and the Congress to reverse the FCC's decision."

The most vociferous opponent to awarding the 1.9GHz spectrum allocation to Nextel has been competitor Verizon Wireless, which has been threatening to challenge any such decision in court. Verizon called the FCC decision "bizarre" and called for Congress to "fix this mess."

In awarding the spectrum to Nextel, the FCC cited an elaborate financial formula. After valuing the airwaves Nextel will receive at $4.8 billion, the FCC figured the spectrum Nextel will give up to public safety agencies is worth $1.6 billion, according to a report by the Reuters news agency. Generally, the cost to Nextel of the new plan is more than Nextel wanted, but less than its competitors had asked for.

Nextel will give up some bandwidth in the 800 MHz band as it had proposed originally in a arrangement called the Consensus Plan.

Verizon Wireless has called awarding band in the 1.9GHz spectrum "a giveaway" and has called for a public auction of those airwaves. As for Nextel, it has been supported by some public safety groups composed of police, fire and emergency agencies.