FCC's Powell Pulls Plug On Nextel Spectrum Move

Nextel Communications' hope for relocating much of its traffic to the 1.9-GHz band are fading, after Federal Communications Commission (FCC) chairman Michael Powell withdrew his support for Nextel's plan to acquire rights to the coveted spectrum.

The focus now moves to the 2.1-GHz band, which Nextel calls "inferior replacement spectrum."

Why is 1.9 GHz so coveted and 2.1 GHz, the higher frequency, so disdained?

"There's a big increase in cost with 2.1 GHz," said Angus Dougherty, president and CEO of wireless-infrastructure company Air Cover, in an interview. "The higher the frequency, the worse the propagation. For instance, you need many more cell sites [towers] for 2.1." Dougherty noted that the 2.1-GHz band also requires more energy than does 1.9 GHz.

The matter of Nextel moving out of the 800-MHz band has come to the fore in recent months because that bandwidth is also home to many public-safety agencies, such as police and fire departments. Nextel has backed what's been called the Consensus Plan, which would shuffle Nextel and public-safety agencies around. The main bone of contention arose when Nextel asked for a 10-MHz chunk of the 1.9-GHz band--in fact, the last remaining swath available in that band. Nextel's competitors, led by Verizon Wireless, complained that Nextel is seeking to cash in on a giveaway worth billions of dollars, further demanding that the 1.9-GHz swath be auctioned.For a wholesale move from the 800-MHz--or any neighboring--band to 2.1 GHz would require "a complete change out of existing systems," entailing significant costs in equipment and operations, Dougherty said. Dougherty, formerly was a wireless specialist at Qwest, explained, for instance, that trees can cause onerous interference in some of the higher gigahertz bands.

The FCC has been struggling to reach a solution on the issue for months. The five-member commission has been divided, with commissioners Kevin Martin and Michael Copps generally favoring Nextel, and commissioners Jonathan Adelstein and Kathleen Abernathy in opposition. Chairman Powell has been the swing vote. Powell said he wants the FCC to reach a decision on the issue before the end of the month. Any decision is expected to be challenged in court by one side or the other.

With billions of dollars at stake, the issue has attracted comments from a broad range of Congressmen, politicians, and public-safety and trade organizations. A group of congressmen and the wireless trade association Cellular Telecommunications & Internet Association have weighed in against Nextel, while the Association of Public Safely Communications Officials and scores of police and fire departments are supporting Nextel.

Dougherty said the mess can largely be attributed to the Telecommunications Act of 1996, which deregulated the telecommunications industry without creating an effective structure for carrying out the seismic changes it created.