Powell Backs Nextel Variation - Broadcasting & Cable

Powell Backs Nextel Variation

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Federal Communications Commission chairman Michael Powell is reportedly close to signing off on some variant of Nextel Communications' offer to pay for broadcasters' switch to digital electronic newsgathering equipment and for new public-safety communications equipment for police and firefighters in exchange for a swath of valuable spectrum.

That's according to reports in The Washington Post and New York Times.

Nextel's move to the new spectrum would also mean it vacates a crowded spot where its customers now routinely interfere with public-safety communications.

It is unclear what the final deal would be, but Nextel was offering to pay about half a billion dollars to equip broadcasters for their new digital ENG space, and another $850 million to fire and rescue folks.

Its competitors, particularly Verizon, argue that it is a sweetheart deal in which Nextel, without having to bid at auction, would get spectrum valued at some $5 billion for that $1.4 billion investment.

Powell signaled that a solution was near in an interview on CNBC's Kudlow & Cramer Wednesday night where, according to The Washington Post, he said: "We have been focused on this problem from one perspective, how to fix the interference problem for public safety... We believe we have come close to figuring out how to do that, and we'll get that decision out to the market soon."

Powell said the deal will not be a windfall for any one company, and that it should be voted on in the next couple of weeks.

Freeing up spectrum for new services while finding ways to use that spectrum, both commercial and government, more efficiently has become a key policy goal for the Bush administration. In fact, the National Telecommunications & Information Administration, which oversees government spectrum, is releasing a spectrum-policy study Thursday, with President George W. Bush scheduled to speak about broadband policy.

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