Nextel Agrees to Airwaves Swap
Cellphone operator Nextel Communications Inc. on Monday accepted a controversial government plan that would require the company to spend billions to revamp its wireless network to prevent it from interfering with police radios and other public safety communications equipment.
Ending a standoff with regulators and an industry archrival, Nextel Chief Executive Timothy Donahue said his company would accept a Federal Communications Commission plan and relocate its 13 million wireless customers to higher frequency airwaves where most other major wireless carriers now operate.
Under the FCC plan, Reston, Va.-based Nextel would pay about $1.3 billion to buy new communications equipment for police and firefighters and pay the government as much as $1.5 billion more for new airwaves in the 1.9 gigahertz band. Nextel currently uses frequencies in the 800 megahertz band adjacent to airwaves used by police and fire radios.
The deal marked a defeat for Verizon Wireless Inc., which had lobbied the FCC to auction the new airwaves rather than “giving them away” to Nextel. It also removed a potential stumbling block to Sprint Corp.’s proposed $35-billion acquisition of Nextel. Nextel said its subscribers would not experience service disruptions during the transition to the new airwaves.
“Nextel has already begun moving forward in order to complete the reconfiguration process,” Donahue wrote in a letter to the FCC released Monday. “Eliminating the dangerous problem of public safety interference is far too important to do anything less.”
Radio frequencies are like the lanes of a freeway. If too many signals are too close together, they can careen into one another and cause interference.
Although radios used by police and firefighters have long broadcast adjacent to the same 800-MHz spectrum as Nextel’s cellphones, complaints about interference drew relatively little government action until Sept. 11, 2001, when public safety officials said airwave interference from cellphones hampered their ability to respond to terrorists who hijacked two airplanes and crashed them into New York’s World Trade Center.
FCC Chairman Michael K. Powell flew to New York to tour the site after the attack. Afterward, he declared that his agency would make reliable public safety communications a key policy goal.
In December, the FCC reduced the amount Nextel would have to reimburse the government in order to help the company finance the move. The FCC has told the company it must complete the airwave transition in three years.
The new airwaves that Nextel will move to are more compatible with Sprint’s network and will allow the companies to more easily upgrade Nextel’s cellphone service to handle high-speed Internet surfing and data communications.
Those services are seen as key to delivering next-generation wireless service such as music downloads and video clips.
“This was critical to getting their deal with Sprint done,” said Rudy Baca, an analyst with Precursor Group, a Washington-based investment research firm. “They want to start off with a pretty clean slate.”
The Assn. of Public-Safety Communications Officials International, the nation’s oldest and largest public safety trade group, had praised the FCC’s plan and urged Nextel to accept it.
