Howard Buskirk

Over a dissent from Comr. Copps, the FCC Thurs. eliminated the cellular cross-ownership rule for all rural markets, no matter the number of competing wireless carriers.

The FCC agreed 5-0 Thurs., after months of arguments, to adopt an 800 MHz rebanding plan, which will give Nextel much of what it wanted, including 10 MHz of spectrum in the valuable 1.9 GHz band. But Nextel may have to pay more than $3 billion, beyond the spectrum it agreed to contribute. The FCC is also requiring that Nextel sign a letter of credit for $2.5 billion to cover all public safety transition costs.

The FCC is poised to take on 3 significant wireless items today (Thurs.), even as the Nextel rebanding order appears bound to seize the headlines at the Commission’s monthly meeting. If all goes as planned FCC will hand down orders designed to encourage wireless carriers to invest in rural communities, promote greater use of smart antennas, and promote a vibrant secondary market for spectrum.

FCC Chmn. Powell is proposing an 800 MHz rebanding plan that would require Nextel to pay for public safety retuning, but not the value of the spectrum itself, unlike an earlier proposal that had been floated, sources said Wed. The order also would require Nextel to provide an additional 2 MHz at 800 MHz as a buffer for public safety communications, a proposal made by the carrier in June.

The deadline for submitting bids in NextWave’s private auction, scheduled for Thurs., came and went Tues. without a decision from the FCC that Nextel would get the 1.9 GHz spectrum it has been seeking. That was a potentially negative development for Nextel, which had pushed for a decision prior to the deadline. The FCC last week put a Nextel order on its agenda for Thurs.’s Commission meeting.

The FCC sent a clear signal last week that it will conduct a thorough investigation of the Cingular-AT&T Wireless merger, sending both companies a 12-page letter late Thurs. raising questions that probe fine points of the merger. Observers viewed the letter as a sign that the FCC may look at the merger more closely than had been thought, rather than leaving the more careful analysis to the Dept. of Justice (DoJ).

President Bush late Thurs. said he would appoint Michael Gallagher NTIA director through a recess appointment. Gallagher has been serving as acting director and was formally nominated in Oct. A White House spokesman said the appointment expires at the end of the next Congress. The procedure seemed to reflect recognition of the difficulty getting even relatively un controversial nominations through the Senate. “I don’t think it’s surprising,” said one lobbyist. “This is a way to avoid the backlog. I think you'll see a lot more recess appointments over the summer.” Theodore Kassinger also received a recess appointment as deputy secretary of Commerce. He was previously general counsel.

Verizon Wireless announced late Thurs. an agreement to buy Qwest Communications wireless assets for $418 million. The agreement includes spectrum licenses in 62 markets in 14 Western and Midwestern states in Qwest’s traditional service territory. All the licenses provide 10 MHz of spectrum in the 1.9 GHz range -- the same spectrum band at issue in the Nextel fight. The companies said 53 of the licenses are in markets where Verizon already has operations and the extra spectrum will provide additional capacity. These cities include Phoenix, Albuquerque, N.M., Tucson, Ariz., Salt Lake City, Minneapolis-St. Paul, Denver, Portland, Ore., Seattle, and Omaha, Neb. Qwest announced last year plans to wholesale wireless through Sprint while selling off its physical assets as well as the licenses for the spectrum. A Qwest spokeswoman said the company intends to continue as a regional carrier. “The sale completes our shift from a network-centric wireless provider to a more customer-focused operation that is designed to deliver exceptional value and service to customers,” said Oren Shaffer, Qwest vice chmn. “The monetization of the network assets further improves our liquidity.” The companies said they hoped to close the deal late this year or early in 2005. Unlike many such deals, the Verizon purchase had not been rumored prior to the announcement.

Comr. Copps Wed. sharply criticized a letter from Verizon Gen. Counsel William Barr suggesting that FCC Comrs. would violate criminal laws if they voted to give Nextel 10 MHz at 1.9 GHz as part of the 800 MHz rebanding proposal. Copps also said he had not seen any interim UNE rules, which he predicted will not be simple to put together.

Comr. Abernathy’s 5-year term as a member of the FCC formally expired on Wed., but that event did not set off alarm bells in her 8th floor suite. Under the Communications Act a member of the FCC is allowed to serve through the session of the Congress that starts the following year. Abernathy would be able to serve without Senate action into Jan. 2006, through the adjournment of the 1st session of the 109th Congress. An Abernathy legal advisor said Wed. she was waiting until after the Nov. election before deciding whether to seek another term. Wed. also marked the one year anniversary of the expiration of Comr. Adelstein’s term. President Bush has yet to nominate him for a full term. Absent Senate action Adelstein will have to leave when this Congress adjourns sine die.