[DJRider]

Will it ever end?


http://www.kansascity.com/105/story/364819.html

Posted on Fri, Nov. 16, 2007 10:15 PM

Regulators threaten a Sprint Nextel network
By JASON GERTZEN
The Kansas City Star

Federal regulators are threatening to shut down part of Sprint Nextel’s network if the company doesn’t fix interference problems with public-safety radios by June.

Though Sprint is making progress, an incredibly complex, multibillion-dollar project affecting 2,200 police, fire and other public-safety agencies across the nation is not on track to meet the deadline.

The possible consequences, according to the latest order from the Federal Communications Commission, include Sprint losing access to radio wave spectrum needed for its Nextel- and Boost Mobile-branded wireless service, which it sells to nearly 20 million subscribers.

Sprint executives stress they are making extraordinary efforts to finish the project and prevent the shutdown of part of the company’s wireless networks. Waivers seeking leniency from regulators are a possibility.

But Sprint also is challenging what it called the commission’s “draconian” action, urging the U.S. Court of Appeals to intervene as soon as possible.

“We are taking it very seriously,” said Lawrence Krevor, a Sprint Nextel vice president. “We have no ability to run a network for 20 million customers based on the uncertainty of whether waivers are granted.”

Industry analysts, while downplaying the possibility of regulators shutting down the Nextel network, acknowledge that major disruptions would arise in a worst-case scenario.

“You are talking about shutting down a significant portion of the network,” said John Byrne, an analyst with Technology Business Research Inc. “That would be a disaster.”

Another challenge

The public-safety communications project is another item on a growing list of high-dollar and high-stakes initiatives Sprint Nextel is struggling to resolve.

Sprint, the Kansas City region’s largest corporate employer, has cut 5,000 jobs already this year, is looking for a new chief executive and routinely surfaces as a potential takeover target. Its shares have fallen more than 18 percent so far this year.

From integrating Sprint with the former Nextel Communications to refining a series of marketing campaigns to improving customer service to hiring new top executives, many of these efforts have not gone smoothly for the nation’s No. 3 wireless company.

“It is symptomatic of an overall difficulty you see in a number of different areas with Sprint,” Byrne said. “The results don’t match the original plans in a lot of ways. Things proved to be more difficult in practice than they seemed like they would be from the outset.”

Sprint inherited responsibility for the public-safety communications project following its acquisition of Nextel in 2005.

Many fire departments and other public-safety agencies rely on radios using the same swath of radio waves that Nextel tapped when it built its nationwide wireless phone network. Nextel’s technology sometimes interfered with the radios.

As public-safety officials reported problems with garbled messages, blocked transmissions and other issues, federal regulators pressed to separate public-safety radio frequencies from commercial services.

This spawned a massive radio wave “rebanding” project that Nextel agreed to take on a few years ago.

Nextel was to surrender one swath of radio wave spectrum and pay the costs for more than 2,200 fire departments, police agencies, local governments, businesses and other organizations across the country to modify their radio systems. In exchange, it would receive access to a new batch of valuable radio waves.

Sprint Nextel must pay a minimum of $2.8 billion, but is responsible for whatever the project ultimately costs. The company has spent about $1 billion so far.

As Sprint has made adjustments, the work has sometimes strained the Nextel portion of its network. Many customers defected after grappling with call quality problems.

The Nextel subscriber base has fallen from 18.6 million in June 2006 to 14.3 million in September.

Disruptions and defections

Many of Sprint’s Nextel customers, including about 3 million law enforcement and other public-safety agency officials, would face service disruptions if federal officials follow through with steps detailed in a recent order should the project miss its deadline.

The more than 27 million subscribers relying on a different part of the network for Sprint-branded service would not be directly affected.

In a motion filed recently with a federal appeals court, Sprint said the commission’s threatened action would result in an “unrecoverable, and irreparable reduction in capacity that will severely disrupt Sprint Nextel’s service” and impair important public-safety communications.

Sprint also filed papers with the Securities and Exchange Commission informing investors of the potential hit to its business. The company said it might have to stop signing up new customers, pay additional incentives for Nextel subscribers to shift to the Sprint portion of the network and face further customer defections.

“A resulting loss of a significant number of subscribers could adversely affect our results of operations,” Sprint stated in the filing.

Noting that the matter is in the courts, FCC officials declined to discuss many specifics of the dispute.

“At this point, Sprint is obligated to meet the rebanding benchmark,” said Rob Kenny, a commission spokesman.

The project officially started in June 2005 and is supposed to be completed within three years, establishing June 26, 2008, as the deadline.

“I don’t think anybody expects it to be done everywhere in the country by then,” said Robert Gurss, director of legal and government affairs for the Association of Public-Safety Communications Officials International.

Blame game

Blame for delays has been directed variously at Sprint, public-safety officials, companies involved in doing the technical work, and the complexity of the project.

Early on, for example, government officials complained that Sprint was slow to provide planning money and negotiate individual projects.

“At one point, the whole process was being bogged down in protracted negotiations and mediation,” Gurss said. “Sprint Nextel was spending dollars to fight over nickels. They were fighting over everything.”

Federal regulators then clarified their expectations and the process of working with Sprint improved, Gurss said.

“The FCC has taken some aggressive steps in the last several months to expedite it,” Gurss said. “That has a lot of promise of speeding up the process.”

Initially, Sprint was being very cautious about controlling costs because executives knew that everything eventually could be reviewed by federal officials, said Scott Sloat, a Sprint spokesman.

“We had to make sure that whatever was being spent was being spent properly,” Sloat said. “We had to adhere to a certain cost standard.”

Krevor, one of the top Sprint executives guiding the rebanding project, said he was hopeful that regulators and other officials would recognize the successes so far of a project involving a cast of thousands. Many radio systems already have been modified.

“That’s amazing progress with no significant hiccups,” Krevor said. “This is a new project and it has never been done on this scale. Incredible progress is being made.”

[TheCEO]

The point being that Sprint brought this problem under their umbrella through the ignorant and ill-informed purchase of Nextel. Sprint did hardly any research before obtaining Nextel, not to mention the under-the-table deals that took place before the buyout. There are so many mistakes that took place, and continue to take place to this very day.

[SLME]

Like I have said before and after the merger. The merger itself was a bad idea.

[JonathanFIUWx]

Originally Posted by SL-10

Like I have said before and after the merger. The merger itself was a bad idea.

should have been alltel

[LJA]

ALLTEL-NexTel? Too many Tel's in that name!

[Dubspoon]

now if they would have made the hybrids had 850mghz frequency added making the hybrids the only new phone available.

[SLME]

Originally Posted by LJA

ALLTEL-NexTel? Too many Tel's in that name!

[zachmorrow]

I bet Gary kept hear the words iDEN and SIM Card, he probably thought that he was being attacked or something...until he was re-informed that iDEN is the network that Nextel uses, and a SIM card is a little card that stores cellular subscriber infomation. Lol