Unhappy Over Moving Costs

Nextel proposal for corporate wireless users to relocate to other bands sparks complaints.

Two years ago, U.S. public safety agencies began having trouble with mobile communications transmissions. The source of the problem, for the most part, was Nextel Communications Corp., which operates radio sites in the same frequencies as the safety agencies, the 800MHz band.

For a while, the 800MHz problem was just one of the spectrum issues under discussion at the Federal Communications Commission, but the Sept. 11 terrorist attacks pushed public safety to the top of everyones agenda.

In November, Nextel offered a plan to move affected parties to different parts of the 800MHz band or to other bands. It also offered $500 million to finance some public agencies costs. But the plan is a nightmare for many private network operators, such as FedEx Corp. and Intel Corp., that also use the band.

The proposal requires corporate wireless users to move their communications off a segment of the 800MHz band at their own cost, and they are not happy. "Its as if your neighbor wants to play a stereo real loud, and you object, so they petition to have you move," said Nathan Lemmon, chief engineer for wireless systems development at FedEx Corporate Services, in Memphis, Tenn.

FedExs 750 base stations support 40,000 two-way radios in the 800MHz band, and the company estimates that it would cost $100 million to move to another band. Beyond that, the company said Nextels plan would keep FedEx from communicating in certain regions near the Canadian border.

FedEx is among companies that wrote letters of complaint to the FCC after the agency issued a Notice of Proposed Rulemaking, or NPRM, in March, explaining the 800MHz problem and including Nextels plan. Because the FCC has already received 200 letters on the issue, it has extended the deadline for responses to the NPRM until next month, when it will begin making a decision.

Corporate responses in the FCC database mainly echo sentiments such as Intels. "Under Nextels proposal, the total costs to Intel to move its radio systems to the 900MHz band would be more than $4 million, even though these radio systems are not causing interference," wrote Greg Slater, Intels senior corporate attorney, in Chandler, Ariz. Slater suggested the FCC apply a "last in, fix it" rule that would require Nextel to foot the cost for resolving the whole problem because the problem didnt begin until Nextel started offering its commercial two-way radio and cellular services on the band. Many private incumbents of the band have been there since the late 1970s.

Even Motorola Inc., which counts Nextel as a major customer of its iDen walkie-talkie phones, filed a 31-page letter warning against the Nextel proposal. Motorola estimated a total cost of $2.8 billion for the industry to follow Nextels plan. "It costs us as much money to relocate to another band as it would public safety [agencies]," said Laura Smith, president and CEO of the Industrial Telecommunications Association, a private network lobbying group in Arlington, Va. "Were just now recovering from a recession. Do we want Americas businesses forking over billions of dollars to move to another band? I dont think so."

Complainants have come up with tentative alternative plans, but Nextel maintains that its plan is the quickest and most effective. "It gives public safety a block that they can begin using immediately," said Leigh Horner, a spokeswoman for Nextel, in Reston, Va. "The problem is going to continue to get worse. Wireless operators are going to continue to meet the demands of their customers."

According to some estimates, it will cost public service agencies more than $500 million to follow Nextels plan, but many responses from these agencies to the FCC favor Nextel.

Critics credit this to Nextels spin doctors. "Nextel is very manipulative," FedExs Lemmon said. "They know the right strings to pull."

The company certainly has bent over backward to ally itself publicly with the public safety community since Sept. 11.

Nextel was the exclusive underwriter of the CBS documentary "9/11," the highly publicized account of the World Trade Center attack from French filmmakers Gedeon and Jules Naudet, which aired in March.

Last month, Nextel announced a strategic alliance with Giuliani Partners LLC to "significantly improve public safety communications across the United States." The Giuliani in Giuliani Partners is Rudy Giuliani, the former mayor of New York and the champion of the citys public safety efforts in the aftermath of Sept. 11.

"Theyre taking a wholesale look at how to fix the problem," Nextels Horner said. "We wouldnt characterize it as lobbying efforts at this point."

Private network providers disagree.

"Nextel is the bad guy here," FedExs Lemmon said. "But theyre doing their best to have the carrot out there that makes public safety side with them, and once thats out there, theres no way we can win."