Verizon Wireless told the FCC a study it commissioned from a nati...

Verizon has been among the opponents of the “consensus plan” for mitigating interference to public safety at 800 MHz, proposing an alternative that would rely on best practices and other interference reduction measures before rebanding was eyed. Nextel has said it would pay up to $850 million to relocate affected private wireless and public safety incumbents. That proposal, whose supporters include the Industrial Telecommunications Assn. and the Assn. of Public Safety Communications Officials, would reconfigure parts of the 700, 800 and 900 MHz bands, with Nextel exchanging its spectrum in each of those bands for spectrum elsewhere, including 10 MHz at 1.9 GHz. Among the thornier policy questions with which the FCC reportedly has been wrestling is how to quantify the value of the spectrum exchanged, particularly bands such as 1.9 GHz. The firm commissioned by Verizon to do an appraisal, Kane Reece Assoc., said in a 156- page report that if the consensus plan were adopted, the value of Nextel’s spectrum holdings would increase $7.2 billion. “Taking into account the amount that Nextel has pledged to pay for relocation, which Kane Reece computes has a net present value of $700 million, the consensus plan represents a windfall to Nextel in the amount of $6.5 billion,” Verizon Wireless told the FCC Mon. Nextel wasn’t available for comment. Kane Reece said it developed an estimate of the “fair market value of the spectrum” Nextel was proposing to give up and what it proposed to acquire. “The spectrum that Nextel would give up is seriously impaired, while the spectrum it proposes to get is not,” Verizon Wireless said. It reiterated arguments that while Nextel had told the FCC it was swapping equivalent amounts of spectrum, “the value of the spectrum it would receive is radically greater than the value of what it will turn in.” The Kane Reece report said the spectrum Nextel proposed to relinquish, including 4 MHz guard band spectrum at 700 MHz and 8.5 MHz of specialized mobile radio spectrum at 800 MHz, was shared with other users and not suitable for wideband, high-speed data services, the report said. The 10 MHz block at 1.9 GHz that Nextel would receive has a “fair market value” of $5.28 billion and the 6 MHz block at 800 MHz is $3.17 billion, the Kane Reece report estimated. Kane Reece said its appraisal used sources such as industry documents, FCC reports and standard appraisal techniques. “We note that our valuation conclusions are probably conservative due to the fact that December 2002 was a relative low point in public wireless equity values and that the FMV [fair market value] of the spectrum derived herein would most likely increase as of a more current date,” Kane Reece said.