Abernathy Says Nextel’s Requested Changes Need to Be Voted
Comr. Abernathy said Thurs. she would oppose making key changes to the 800 MHz rebanding order, at least on the scale of some changes Nextel has sought, without an FCC vote and probably only following a formal petition for reconsideration. Abernathy also said during a press briefing that she expected the Cingular-AT&T Wireless merger order to be sent to the commissioners in the next few days.
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Other Comrs. would also look “askance” at trying to address issues involving hundreds of millions of dollars in “errata,” sources said Thurs. Verizon Wireless in particular has protested Nextel’s push to get the Commission to issue errata clarifying that it miscounted the number of MHz POPs for which Nextel should get credit.
Nextel has argued that the FCC miscalculated the value of its spectrum contribution by almost $740 million and should address that immediately. Abernathy said: “I don’t think we can do something like that through an errata… Erratas are basically for more clerical errors in the item. That’s a very limited tool.”
Abernathy indicated the Commission could address an error in counting POPs “sua sponte,” or on its own initiative, a less formal process than acting on a petition for reconsideration from Nextel. The Commission can take that step until 30 days after an order is published in the Federal Register. Abernathy said she would be open to the advice of other rebanding players about reconsideration.
“When you get to sua sponte recon you have to make a call,” Abernathy said: “Is this internal inconsistency or a failure to count right? Is it really a reconsideration? Are they coming in and asking us to change something fundamentally in the order? We do want to hear from the other side.”
Abernathy said Nextel hadn’t briefed her on a 2nd major financial question it raised - whether the FCC should recognize it will need to add base stations to replace 800 MHz capacity lost in the band reconfiguration. Here too Nextel is seeking a clarification that could save it hundreds of millions of dollars.
On the Cingular-AT&T Wireless merger, Abernathy said she expected an order to circulate in the next few days and that the Commission would likely take weeks but “not months” to reach a conclusion. The FCC’s self-imposed deadline for making a decision on the merger expired Tues. “It’s not something we can decide over 2 days or a week; we really have to get educated on it,” she said.
Sources told us Thurs. that disagreements among parts of the FCC -- including the Wireline Bureau, Wireless Bureau and Office of Gen. Counsel -- had slowed completion of a merger order. One issue getting significant attention is wireline-wireless competition. Sources said the issue has troubling implications for the merger on 2 fronts.
First, one of the main arguments Chmn. Powell and others made for elimination of UNE-P is that intramodal competition is being replaced by intermodal competition. “If it turns out that the main intermodal competitor is completely dominated by an RBOC then you have a problem,” one source said. “It may set the stage for making it impossible to turn down a Verizon-Sprint merger.” Some members of the Commission have concerns that, with the merger, more than 50% of U.S. wireless will be controlled by a Bell-affiliated company. Second, some at the FCC have concerns about the bundles Bell-affiliated wireless carriers can offer - for example, DSL, wireline voice and wireless on one bill. The dilemma the FCC is exploring is: “Imagine if Verizon and Cingular both do that in their regions? How is any other competitor going to be able to compete with that?”
Abernathy said wireline-wireless issues need to be addressed by the FCC. “What I will certainly be looking at is how many potential competitors do you have in each market between both wireline and wireless and wireless providers,” Abernathy said: “I will be looking at each market, what’s the market strength, how much spectrum is involved.”
Asked how the FCC would use the truckloads of data it collected from competitors to Cingular and AT&T Wireless, Abernathy said she posed that question to staff. “The whole purpose was to have an understanding by market what the different shares were for the wireless providers,” she said. Abernathy said she’s trying to keep an open mind on financial aspects of the merger and will rely on antitrust experts and economists at the agency as she reaches a decision.
On the air-to-ground order, which was pulled from the agenda for the Oct. meeting (CD Sept 27 p1), Abernathy said she hadn’t formed any opinions how she would vote. “The real important issues are making sure there is a competitive alternative out there and that we've addressed interference concerns.” - Howard Buskirk