recent MRT article on rebanding

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Jul 19, 2004

"Under the FCC's order, rebanding was supposed to be completed in a three-year period ending this June. There was no cap on the amount of money Sprint Nextel would have to spend on rebanding, but most believed the $2.8 billion obligation would be more than enough to cover the costs, with any surplus earmarked to go into the national treasury -- the reason is why rebanding accounting was styled to meet government standards.

While rebanding is proceeding, it bears little resemblance to the initial vision expressed by the FCC.

It's been slow. Four years after the FCC passed an order calling for rebanding to be done in three years, the most optimistic scenario we hear today is that it will take another four years to complete the massive project, in 2012 -- and that's assuming vital border agreements are finalized in a timely manner.

It's also been a spectral headache. Under the terms of the FCC's order, Sprint Nextel would be finishing up rebanding and beginning to execute its plans to utilize contiguous spectrum in the 800 MHz and 1.9 GHz bands. Instead, 800 MHz capacity issues related to rebanding have helped erode much of the value of the old Nextel iDEN network, as customers are dropping the service in droves. It's going to be several years before Sprint Nextel can use the contiguous spectrum blocks.

And it's been expensive. In its 10-K filing with the SEC a week ago, Sprint Nextel said it is "unlikely" to make any payments to the government after rebanding, estimating that its total costs will be $2.7 billion to $3.4 billion -- and that's the best-case scenario. Bigger money is tied to the outcome of litigation....."
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