GAO Clears Nextel Deal - Broadcasting & Cable

GAO Clears Nextel Deal

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The General Accounting Office declared Monday that the Federal Communications Commission's plan to let wireless company Nextel Communications swap some of its existing spectrum for broadcasters' channels was perfectly legal.

Sen. Frank Lautenberg, D-N.J., in June asked GAO to investigate whether the deal violates federal law requiring spectrum to be auctioned.

The Government Accountability Office finding appears to finally pave the way for broadcasters to be compensated for vacating special channels TV stations use to beam news reports from remote locations to their studios.

FCC Chairman Michael Powell said he was happy the deal can go forward without the stigma of questionable propriety. "The GAO independently confirmed that the commission's authority to regulate spectrum in the public interest is broad enough to include the tools we utilized to resolve this critical public safety matter."

Nextel is giving over frequencies it uses on the 800 MHz portion of the spectrum for local public safety departments to use. It will move to a portion of broadcasters' electronic newsgathering channels located on the 2 GHz section of the spectrum band.

Nextel has promised to compensate TV stations for the cost of buying new digital equipment that will accommodate the smaller channels that must be phased in on stations' remaining newsgathering channels. Broadcasters are obligated to begin relinquishing a portion of their remote newsgathering channels this year.

Previously, satellite communications companies were slated to get all the channels and were obligated to reimburse stations for the costs of switching equipment. Because of the satellite companies' shaky finances, however, broadcasters worried that they would lose the spectrum without getting paid.

Now, with Nextel promising to pay, stations no longer face the threat of fronting costs that won't be reimbursed.

Verizon and other mobile phone carriers opposed the plan as a giveaway to Nextel and wanted the 1.9 GHz spectrum auctioned. But Verizon ended its dispute when Nextel agreed to let Verizon market "push-to-talk" wireless phones, a feature Nextel once argued it had exclusive rights to offer.

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