FCC Approves Nextel Plan to End Disruptions

Byline: Christopher Stern

The Federal Communications Commission ordered Nextel Communications Inc. to pay at least $3.2 billion in a complex compromise aimed at freeing up airwaves for public safety officials.

The plan, approved unanimously by the FCC today, gives Reston-based Nextel valuable new slices of spectrum in exchange for giving up some of its current airwaves to public safety officials. In addition, Nextel must pay for police, fire and other emergency workers to buy new equipment that is compatible with the new frequencies.

The public safety officials say they need the new spectrum because the airwaves used by Nextel customers interfere with their communications.

With the new airwaves, Nextel will be able to expand its current wireless phone business and offer new data services. The total value of the spectrum Nextel must give up is $1.6 billion, according to FCC estimates. But the spectrum it is receiving as part of the deal is worth much more -- $4.8 billion, according to the agency.

Critics of the deal, including rivals such as Verizon Wireless, have claimed that earlier proposals by Nextel to swap the spectrum amounted to a huge financial boon for the company. But under a compromise worked out late last night, Nextel must pay the federal treasury an "anti-windfall payment" if the value of the airwaves it is giving up and the cost of moving public safety officials to new airwaves adds up to less than $4.8 billion.

The plan is expected to take at least 36 months to implement. However, legal challenges from Nextel rivals could drag out the process for much longer.

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