WASHINGTON-A coalition of dispatch radio operators urged the Federal Communications Commission to restrict Neoworld Inc. from readily reselling to Nextel Communications Inc. licenses purchased from Geotek Communications Inc.’s creditors in March.
The Alliance for Radio Competition, organized to oppose Nextel’s failed attempt to buy all 191 specialized mobile radio licenses from bankrupt Geotek for $150 million, said the FCC should prevent Neoworld from assigning licenses to Nextel during the first five years of system buildout.
After the Justice Department blocked Nextel’s purchase of Geotek’s 900 MHz SMR licenses, Nextel reached a settlement with government lawyers last summer allowing the nation’s top dispatch operator to buy Geotek licenses not covered by a 1995 antitrust consent decree.
In addition, Justice agreed to end antitrust restrictions five years sooner than called for under a 1995 consent decree. A federal judge approved the Justice-Nextel deal last December. As such, Nextel is free of government-imposed barriers to the SMR market on Oct. 30.
Neoworld, headed by Nextel co-founder Brian McAuley, entered an asset purchase agreement with Geotek’s secured creditors (Hughes Electronics Corp. and Wilmington Trust Co.) in March. Neoworld has not disclosed how much it paid for the licenses.
In May, McAuley told RCR that Neoworld is targeting that part of the dispatch market discarded by Nextel and not adequately served by existing SMR operators. McAuley is considering integrated Dispatch Enhanced Network technology engineered by Motorola Inc. and digital channel multicarrier architecture technology championed by ComSpace Corp.
“ARC believes this is a fair remedy. It would prevent Neoworld from acting as an intermediary for Nextel, allowing Nextel to circumvent its own consent decree restriction against ownership prior to October 2000,” ARC stated in a June 16 filing with the FCC.
Despite those concerns, ARC said valuable 900 MHz SMR licenses in 14 major markets should be transferred from Geotek’s creditors to Neoworld and that Neoworld should have a fresh five-year construction period to construct the systems rather than being forced to build them within the next 12 months.
Two-way radio dealers agree.
“Neoworld’s proposed system would allow additional alternatives for increased competition in the dispatch market,” said Terry Zaccarino, president of Communications Electronics of Virginia Inc. The firm is an authorized Motorola two-way radio dealer.
Roger Schuknecht, of Communications USA Inc., said Neoworld “will be helping to mitigate the capacity problems which plague the industry.”
Independence Communications Inc., a dealer in the Cleveland area, said its customers are also looking for new options.
“Independence has been in the unenviable situation of recognizing the current demand while being unable to satisfy it. Consequently, Independence has not been able to grow its business to the extent it could,” said President Don DiGeronimo.
ComSpace Corp. President Steven Fulford also recommended that the FCC approve the transfer of licenses to Neoworld.
