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Abstract
In April, Sprint Nextel asked the Commission to give it greater flexibility in approving cost estimates from licensees (TR, May 1). Rather than using a "minimum necessary" cost standard, which it has interpreted to mean the "absolute lowest cost," it said it should be able to pay costs that are "reasonable and prudent" and also "are consistent with the Commission's objectives in the overall band reconfiguration initiative." Sprint Nextel said that absent a clarification, it had to ensure that it didn't pay for relocation costs that were above the minimum or risk violating its antiwindfall payment obligation. The company has estimated that the hundreds of cases referred to mediation would drop by more than half if the FCC clarified its rules.
"We agree with Sprint that the term 'minimum necessary' cost does not mean the absolute lowest cost in all circumstances," the Commission said in its order, which ran just more than four pages. "Rather, the term refers to the minimum cost necessary to accomplish rebanding in a reasonable, prudent, and timely manner. We do not expect Sprint to insist on reducing rebanding costs to their lowest possible level if the cost savings it seeks to achieve come at the expense of a reasonable, prudent, and timely approach toward accomplishing the rebanding task in question."
An agency source noted that "joint statements from all the Commissioners are pretty unusual," adding, "They're meant to send a signal." The source added, "It's kind of a shot across the bow to Sprint Nextel to get serious."
Although stakeholders have frequently acknowledged that the transition isn't likely to be done in the 36-month time frame, Mr. [Derek Poarch] said FCC officials were focusing on the June 2008 deadline. "At this stage, I haven't heard anyone say that they're willing to start thinking about moving the date," he said. "Everyone that I'm talking to is saying, 'You need to be moving toward this date.'"