As expected, Nextel CEO Tim Donahue told the FCC on Monday his company approved a deal that gives TV stations up to $500 million for some special channels the cell phone giant wants to use.
Nextel had until today to accept an FCC plan to hand the company a chunk of frequencies used by local TV news crews to beam live remotes back to their studios. In return, Nextel must compensate the stations, write a $2.2 billion check to Uncle Sam and give some of its current cell phone spectrum back to the government.
Since the FCC’s final offer was floated in December, Nextel has been cagey about its plans to go forward and hinted it thought the government was demanding too high a payment.
The deal was designed to benefit not only Nextel, but also TV stations and local emergency departments. Currently, Nextel shares some frequencies with emergency communicators, and in many markets the channels are overcrowded. During major disasters, local officials say they sometimes can’t find enough open frequencies for emergency workers to communicate with each other.
With homeland security topping the government’s agenda, making communications easier for safety officials has been a top FCC priority.
“Solving public safety interference and securing additional spectrum have been long-standing priorities for first responders, and we’re pleased to stand with the men and women who protect America's communities,” Donahue said.
Nextel stated it will begin the realignment process immediately. The company has offered to let local officials have their channels to themselves, but only if it gets a portion of TV stations’ “backhaul” channels.
Since TV stations were already required to return part of the frequencies, they are happy with the deal, especially because Nextel has agreed to cover the cost of new digital equipment needed to operate on their remaining smaller swath of spectrum.
Broadcasters say the cost of converting or buying new equipment will be in the range of half a billion dollars. All stations are eligible for compensation, but must negotiate with Nextel over the total each one is to receive. Stations that must replace their entire stock of backhaul equipment will be entitled to more than those that can simply retune existing equipment.
FCC Chairman Michael Powell said he was gratified that Nextel agreed to the plan.
“This has been the most difficult, complex and challenging issue I have faced in seven years at the Commission.”