For the most part, the decision implements the major components of the Consensus Plan with one major difference. The FCC mandated a higher cost on Nextel for the 1.9 MHz, which is a windfall for public safety because it earmarks $2.5B to cover the rebanding for public safety. The FCC says they did this with public safety in mind. Commissioner Abernathy told me, "The most important concern for the Commission was to insure that the costs are covered to reband public safety and do it in a way that no public safety agency will have to pay any out-of-pocket expense." Overall, Nextel will be required to pay up to $4.8B for the additional spectrum which is very close to the market price suggested by Verizon.
In summary, today's FCC ruling does the following:
- Reconfigures and separates public safety frequencies from commercial wireless services in the 800 MHz band within 36 months.
- Nextel will be required to put up a $2.5B irrevocable letter of credit on file.
- Incorporates a "Transition Administrator" to oversee administrative and financial and provide accountability for the reconfiguration process. The administrator will authorize disbursement of funds for the band reconfiguration based on requests by affected parties and to resolve funding disputes.
It is best described as a "bittersweet" decision. It is sweet because it does address all of the concerns of public safety and it provides a significantly higher amount for the rebanding costs. It is bitter because it is not certain that Nextel's shareholders will approve the additional cost as required by the rule. We knew that if the Consensus Plan were adopted that all parties would agree and the process would begin. Now there is uncertainty and we are "holding our breath". I hope that this will be something that Nextel will be able to support; otherwise we are back to square 1.
I would like to applaud FCC Chairman Powell and the other Commissioners for making such a bold stand for public safety and staying the course. The solidarity by the unanimous decision sends a strong message about their strong support of this rule and reemphasizes their commitment to public safety. Chairman Powell and the other Commissioners expressed their appreciation for all that public safety does and that "those that wear the shield" deserve nothing less.
The following statements were made in a press release by the International Association of Fire Chiefs today:
"For more than five years, public safety professionals have been struggling with unreliable and unclear communications, which has jeopardized lives and the citizens they protect. We applaud the FCC for its leadership and decision in support of the public safety community. We are grateful to FCC Chairman Powell and the Commissioners for their careful consideration in this important proceeding," said Chief Ernest Mitchell, president of the International Association of Fire Chiefs.
"The IAFC looks forward to working with the FCC and the wireless industry to implement this critical plan immediately. We understand the FCC has asked Nextel to go beyond their original pledge of spectrum exchange and supplemental financial compensation," Mitchell said, "We don't know what Nextel is planning to do, it's up to them to accept the plan."
The Consensus Plan was the solution recommended by public safety organizations like the International Association of Fire Chiefs (IAFC), the International Association of Chiefs of Police (IACP), the National Sheriff's Association (NSA) and the Association of Public-Safety Communications Officials (APCO).
But all is not over. According to other news reports including the Associated Press and RCR, Verizon and CTIA have released statements in opposition. The Cellular Telecommunications & Internet Association released a statement criticizing the decision. "Giving up such valuable spectrum without a public auction means the U.S. Treasury is losing billions of dollars. Those funds could've been used to provide public safety with money to make much-needed improvements in the vital care it provides all of us," said CTIA President Steve Largent. Verizon has now changed its position on this issue for the 11th time.
What CTIA suggests, "Those funds could've been used to provide public safety with money to make much-needed improvements in the vital care...." is quite frankly a delay tactic and pretty much a pipe dream. There are many things that could be done but I think if we look at past auctions that could have been used for this purpose, they simply don't.
It is also important to note that Nextel has been an equal partner to get the plan where it is today.
After extensive review by the FCC and its very capable staff, they came to the same place where public safety has been all along. More to come once the details are reviewed.
