FCC, Nextel Agree to End Cell Phone Interference

WASHINGTON – Nextel Communications Inc. (NEXT) agreed Monday to a plan by federal regulators aimed at ending the interference from Nextel cell phones that disrupts public safety communication systems in hundreds of communities.

The Federal Communications Commission (search) will give Reston, Va.-based Nextel a new piece of broadcast spectrum in return for the company vacating other spectrum and paying to reconfigure the airwaves it currently occupies.

The multibillion-dollar agreement is the end of a yearslong process aimed at eliminating cell phone interference that in some cases leaves police, fire and other emergency personnel unable to communicate.

There have been no reports that such interference caused injuries or deaths, though public safety officials have said personnel are endangered whenever they respond to a call and cannot communicate.

"This has, indeed, been the most difficult, complex, and challenging issue I have faced in seven years at the commission," FCC Chairman Michael Powell (search) said. "It is gratifying on so many levels to see the plan coming to life."

Powell was joined at a news conference by Nextel President Tim Donahue, who called the agreement "simply the right thing to do for first responders, homeland security and for Nextel."

Donahue said the transition would begin immediately and should be completed in three years. The company's planned merger with Sprint Corp. (FON) won't affect the agreement.

Radios used by police, firefighters and other first responders now broadcast on the same 800-megahertz spectrum as Nextel cell phones. So, for example, if a radio dispatch is made at 850 MHz near a Nextel cell tower broadcasting at 851 MHz, the radio signal can be drowned out.

Under the agreement, Nextel will give up spectrum in the 800 band in exchange for new valuable spectrum in the 1.9-gigahertz range, where other major wireless carriers operate.

The commission has valued the spectrum being returned at about $1.6 billion, but Nextel contended it was worth more. The FCC reworked the deal in December to increase the spectrum's value to $2 billion, which would be credited toward the price Nextel would pay for the new spectrum it would receive.

Nextel will pay about $1.3 billion for relocating public safety groups and clearing its new airwaves, and will pay the government about $1.5 billion for the new spectrum.

Rival cell phone company Verizon Wireless has protested the FCC plan, saying it amounts to a taxpayer giveaway to Nextel. Verizon wanted the 1.9-GHz spectrum to be publicly auctioned and has said it would be willing to pay $5 billion.