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August 7, 2007

Sprint Nextel's Move off Old Spectrum for Public Safety Users Lags

By Glenn Fleishman

The Wall Street Journal reports that the 2004 deal with Sprint Nextel for cleaning up public safety static is still vastly far from complete: The company agreed to pay up to $4.86b to consolidate its messy Nextel holdings that were interwoven with public safety frequencies; they also got 10 MHz as an incentive. The money was to paid directly to police, fire, emergency, and other public safety entities to get new gear to move from the frequencies that Sprint Nextel would gain, to new, unencumbered ranges. It was a win-win for Nextel and public safety agencies, while other cell companies carped at the low price Nextel managed to agree to.

Any dollar below $4.86b goes to the Treasury; any dollar over is paid by Sprint Nextel. This produced a dilemma. Sprint Nextel has every release to keep costs to $4.86b to the dollar, and they can wrap that in a flag: “Every dollar we spend is a dollar that doesn’t go to the U.S. Treasury,” Lawrence Krevor, Sprint’s senior vice president, government affairs, told the Journal.

However, the cost may be vastly higher than estimated. Sprint Nextel is playing hardball in every negotiation and won’t be nearly complete within the three-year required period, which ends soon. Motorola says it’s shipped 1% of the needed equipment. Sprint Nextel says it’s paid $1.5b of the possible $4.86b. But then the Journal finds stories like the one in Chester County, Penn., where the emergency services director says he’s been working for three years to get the fee set for the preliminary studies for communications upgrades without success. He estimates the final cost could be $18.5m to $150m—for one county in Pennsylvania. They might be atypical, but I doubt it.

Interference persists, and AT&T is demanding action due to their own requirement to investigate (at their own expense) any incidents that occur, even when they are apparently mostly or always due to Nextel’s gear.

Can’t wait for the lawsuits.

Posted by Glennf at 3:19 PM | Comments (0) | TrackBack