Sprint Nextel loses 800 MHz court ruling

A federal appeals court affirmed the Federal Communications Commission’s decision to eliminate interference to various public-safety radio systems, an action requiring Sprint Nextel Corp. to vacate 800 MHz frequencies by June 26 even if first responders have not relocated to other spectrum in that frequency band by then.
“Sprint is disappointed with the court’s decision,” the No. 3 mobile phone carrier stated. “Sprint has been and continues to be committed to working with public safety to eliminate the risk of interference for public-safety communications. However, more than 500 public-safety agencies have requested more time — in many cases, years — to complete their retuning activities. Sprint has agreed to provide spectrum to public-safety licensees within 60 days of when they are ready to retune. In addition, we have requested waivers to remain on these channels pending these retunes.
“We remain hopeful that we will be able to resolve this issue in a manner that balances the 800 MHz reconfiguration with the needs of our customers — especially the 3 million public-safety customers who rely on our iDEN network.”
Sprint Nextel argued the June 26 deadline was arbitrary and capricious.
The U.S. Court of Appeals for the District of Columbia Circuit disagreed.
“That deadline — which was never premised on a synchronized spectrum swap — has not changed,” the court’s ruling stated. “What has changed are the implications of the deadline: It now appears Nextel might have insufficient spectrum come June because numerous NPSPAC [National Public Safety Planning Advisory Committee] licensees won’t be able to relocate.”
FCC spokesman Robert Kenny said, “We are pleased with the court’s decision. We will continue to focus on clearing this spectrum for public safety and resolving the interference issues that America’s first responders now face in many regions of the country.”
While the decision creates regulatory and operational uncertainties for the already-struggling No. 3 mobile-phone carrier, there appears to be options that could mitigate potentially negative consequences.
“At a minimum, we expect the FCC to provide some token extension of time to Sprint, possibly six months or so since it’s clear they will not be able to complete the re-banding process by this June,” said Jessica Zufolo, an analyst at Global Medley Advisors L.L.C. “However, today’s court outcome emboldens the FCC, which has tried to keep Sprint on a strict time table.”
“After today’s ruling, Sprint’s vulnerability is that operations may be disrupted in the markets covered by those 500 public-safety agency operations if the FCC does not itself extend the deadline,” said analysts at Stifel, Nicolaus & Co. Inc. “We expect that Sprint will now seek extensions from the agency for the ‘interleaved’ spectrum clearing.”
Stifel analysts noted that Sprint Nextel warned in a recent Securities and Exchange Commission filing that if it lost the appeal, costs could exceed $3.4 billion. However, the analysts added that they consider such an outcome an unlikely worst-case scenario stemming from strict FCC enforcement.