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Mobile phone carriers Nextel Communications Inc. and Verizon Wireless Services called a truce Tuesday that removes a major obstacle to a potential multibillion-dollar spectrum swap between Nextel and the government. Verizon Wireless, of Bedminster, N.J., agreed not to use its considerable resources to oppose the spectrum swap, should it take place. In return, Nextel said it will not pursue its trademark rights to phrases such as “push to talk,” which refer to a walkie talkie-type function on mobile phones Verizon is developing and which Nextel now markets. In an attempt to address interference on emergency communications channels used by public safety workers such as police officers and firefighters, the Federal Communications Commission issued a proposal based on a suggestion by Reston, Va.-based Nextel over the summer. The government and the carrier would swap the public safety spectrum for other wavelengths, which would not encounter interference. When the government asked for Nextel’s take on the plan, the carrier wanted some changes. For one, it did not think the FCC was adequately valuing the spectrum it would surrender, and required it to make too much of a cash payment. Nextel also sought clarifications regarding the letter of credit it would have to arrange to cover the costs of retuning communications equipment. The company’s officials have been optimistic about their chances. “Nextel believes that we could accept the FCC’s decision, provided that certain clarifications are made in the report and order,” said a Nextel spokesman said Tuesday. Verizon Wireless, a joint venture of Verizon Communications Inc. and Vodafone Group plc, had been a vocal opponent of the proposal, and argued that the spectrum should be licensed. If the carrier litigated, it could have held up a transaction even if the FCC and Nextel came to terms. “Verizon was a real pain for Nextel during the entire process, and they kind of hinted they were going to continue being a pain as long as they could,” said Greg Gorbatenko of Marquis Investment Research in Chicago, who believes Nextel gets the better end of the deal. Investors seemed to agree, as gains in its stock price boosted the carrier’s market cap by about $1 billion. Other parties could still fight the proposal, the outlook for the transaction has improved. “Although Nextel is not completely out of the litigation woods yet,” wrote Legg Mason Inc. analyst and former FCC chief of staff Blair Levin in a Tuesday note, “no other party has shown the resolve and resources that Verizon had to challenge the spectrum swap.” Copyright �2004 TDD, LLC. All rights reserved.

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