Nextel Communications on Monday accepted a U.S. government plan to eliminate interference with public safety radios in the 800MHz frequency band, clearing the way for the U.S. mobile operator to give up some of that spectrum in return for frequencies in the valuable 1.9GHz band.
The U.S. Federal Communications Commission (FCC) took action in response to interference problems that were first reported in 1999 and have gotten worse, according to the agency. Calls on Nextel's cellular network, which uses frequencies very close to those of police and fire department radios in some locations, have interfered with public-safety communications. The FCC unanimously approved a plan to solve the problem last July and has adjusted it in response to feedback from Nextel, according to Tim O'Regan, a spokesman for the Reston, Virginia, carrier.
In addition to giving up 4.5MHz of its 18.5MHz of licensed spectrum in the 800MHz band, Nextel will cover all the costs of moving public safety networks and other radio users into some of that abandoned spectrum and will modify its own network with filters and other features to prevent future interference, O'Regan said. The approximately 2,000 licensees in the affected band include public safety agencies as well as some small cellular operators and other users such as utilities, he said.
In return, Nextel will receive two 5MHz bands in the 1.9GHz band. The company, which agreed in December to merge with Sprint and expects to close that deal by midyear, has not decided what it will do with the new spectrum, O'Regan said. For technical reasons, having larger chunks of spectrum in the higher frequency band should make it easier for Nextel to introduce new data services, IDC analyst Shiv Bakhshi said last year. The FCC estimates the value of the 1.9GHz spectrum at about $4.8 billion. If the cost of moving other users to new frequencies, making changes to prevent interference and giving up spectrum does not add up to $4.8 billion in the end, Nextel must pay the remainder to the government, according to O'Regan.
The plan has drawn fire in the past from competitors such as Verizon Wireless, which has said the FCC is giving Nextel a windfall at taxpayer expense. Verizon could not immediately be reached for comment on Tuesday. O'Regan defended the deal, saying Nextel is taking on the burden of reducing interference for public-safety agencies.
Nextel, which has established a strong customer base among small and medium-sized businesses, had about 15.4 million subscribers in the third quarter of last year, according to information on its Web site. Along with its Nextel Partners business, the carrier has a network that reaches 260 million people in the U.S., it says.
Nextel has already begun preparing its engineering team and working out contracts with public safety agencies to make the frequency changes, O'Regan said. The process is expected to take about three years. The next step is for the FCC to respond to a detailed plan by a transition administrator in the case, O'Regan said. An FCC representative was not available to comment on when the agency would respond to the plan.