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Wavelengths
Nextel’s wish came true
By Robert Schwaninger
March 14, 2008
Back in August of 2004, I read the FCC’s 800 MHz rebanding order.
Actually, I read it about six times because I knew what the implications
would be for my clients. And when I finished, I said to myself (and
others), “be careful what you wish for.”
Nextel managed to convince the FCC and others to support a reshuffling
of the 800 MHz band that would create upheaval for public safety
entities from sea to sea while the projected benefits to Nextel were
questionable at best. As MRT Senior Writer Donny Jackson noted in this
space last week--“Rebanding
doesn’t look like a ‘sweetheart’ deal anymore”-- many of us
knew in 2004 that the deal was likely to lose value over time.
But Nextel finessed that problem by merging with Sprint and that’s
what rebanding was truly all about. Nextel was built to sell. From its
beginning in 1991, nearly every step taken by the company could be
understood if one simply said to oneself, “what would I do if I wanted
to sell this company?” Rebanding was simply an extension of that
singular corporate strategy.
Consider that Nextel could have revised its system for less money and
achieved non-interference. Yet, Nextel chose the more expensive route
that enabled it to obtain the rights to the 1.9 GHz spectrum that
created the glue for binding it to Sprint. Nextel’s reasoning was
dead on. By accepting the obligation of financing the rebanding effort,
Nextel would finally obtain spectrum that was vital to any merger with a
major broadband carrier. It was, at last, salable.
Now Sprint Nextel is saddled with the orphan technology iDEN and the
millions of customers that are exiting the network, enticed by the more
feature-rich devices marketed by AT&T and Verizon. Sprint Nextel’s
800 MHz infrastructure is old, its site leases are expensive, its
channel depth is weak -- particularly during rebanding -- and its
operating costs are comparatively high. Meanwhile, the right to
commence building out at 1.9 GHz moves farther into the future as Sprint
Nextel is unable to deliver on the rebanding timetables set forth by the
FCC.
So, what can Sprint Nextel do to spare itself additional financial
bleeding? It could take a page from Nextel’s old strategy and
position itself to sell all or part of its assets. I am convinced that
Nextel’s original rebanding strategy included a failsafe: If Nextel
found itself in financial straits at the end of the rebanding project,
it would flip its 800 MHz spectrum to the adjacent cellular carrier.
A few years from now Sprint Nextel will be in even greater financial
difficulty than it is today. It will be trying to salvage its shrinking
telephony customer base while confronting a very expensive build-out of
its 1.9 GHz and 2.5 GHz systems. It will need cash and the credit
markets may or may not welcome Sprint Nextel’s entreaties. It will
then be time to sell the 800 MHz block and kill off the iDEN white
elephant.
When Sprint dumps the 800 MHz spectrum block, it also will dump the
Nextel name. The distinctive Nextel “chirp” will become a quaint
reference to times past, like the sound of a trolley bell. Old timers
will remember with pride -- and horror -- the 800 MHz wars. And public
safety entities will long distrust broadband carriers as a vestige of
these turbulent times.
In 2004, I thought that Nextel should be careful what it wished for.
But Nextel’s wish came true. It finally sold itself to another
broadband carrier. Only time will tell whether, in the aftermath of
that merger, Sprint will adopt the Nextel business culture. We will
know that it did if Sprint announces its merger with AT&T.
Attorney Robert H. Schwaninger Jr. is the president of Schwaninger &
Associates, a Washington, D.C., law firm that is representing numerous
public safety licensees in 800 MHz rebanding negotiations. He can be
reached at rschwaninger@sa-lawyers.net.
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In the News
FCC
extends E911 benchmark compliance deadline
By Donny Jackson
March 14, 2008
Wireless carriers will have at least an additional six
months to comply with the first benchmark designed to improve location
information given to public safety answering points (PSAPs) when
wireless 911 calls are made, according to a public notice released this
week by the FCC’s Public Safety and Homeland Security Bureau.
Upstart
announces plans for spectrum marketplace
By Donny Jackson
March 10, 2008
After a year in stealth mode, Spectrum Bridge today
announced the launch of its company, which plans to build an online,
real-time spectrum commodities market to let spectrum holders monetize
underutilized airwaves and allow entities to lease licensed spectrum for
operations.
Click here for more
news stories
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