Subject: [NEXTEL-1] Leading Independent Appraisal Firm Shows Kane Reece Study Not Reliable

From: [email-masked]
Date: Thu, 06 May 2004 18:10:41 -0400

Leading Independent Appraisal Firm Shows Kane Reece Study Not Reliable
Thursday May 6, 3:10 pm ET

Prestigious American Appraisal Associates Faults Kane Reece
Analysis Funded by Verizon

RESTON, Va.--(BUSINESS WIRE)--May 6, 2004--Nextel Communications, Inc.
(NASDAQ:NXTL - News) today submitted an independent assessment of
spectrum valuation to the Federal Communications Commission (FCC) for WT
Docket 02-55, Improving Public Safety Communications in the 800 MHz
Band. This assessment, conducted by American Appraisal Associates
(American Appraisal), the world's largest independent valuation
consulting firm, provides additional evidence that the spectrum
valuations submitted by Verizon Wireless to the FCC are inaccurate,
undervalue Nextel's current spectrum holdings and overestimate the value
of the 1.9 GHz replacement spectrum under consideration in this
proceeding.

American Appraisal examined three
filings prepared by Kane Reece
Associates, Inc., which were
submitted into this proceeding by
Verizon Wireless on October 23,
2003, February 9, 2004 and April 8,
2004. It concludes that certain
assumptions in the Kane Reece
methodology are incorrectly applied
and deviate significantly from Wall
Street norms concerning financial
risk and investment opportunities in
the wireless industry. As an
example, Kane Reece's spectrum
valuation model is extraordinarily
sensitive to changes in the assumed
discount rate for a wireless
operator; i.e., a one percent increase in the discount rate assumption
reduces the estimated value of 1.9 GHz spectrum by one billion dollars.
Yet Kane Reece used an unreasonably low discount rate, thereby inflating
its 1.9 GHz spectrum valuation.
In American Appraisal's opinion, Kane Reece inaccurately devalued the
spectrum Nextel would contribute to the Consensus Plan concluding that
Kane Reece "has not addressed how Nextel's spectrum could be so
materially impaired and still enable Nextel to have returns which are
among the highest in the wireless industry." Kane Reece also failed to
follow the Uniform Standards of Professional Appraisal Practice by
making a series of substantial errors that affect the credibility of
their results.
Commenting on their assessment filed today with the FCC, Richard
Billovits, vice president and principal, American Appraisal Associates,
noted, "Given the number of inaccurate financial assumptions and errors
of methodology of the Kane Reece analysis we must reject their valuation
conclusions."

Lawrence R. Krevor, vice president of Government Affairs for Nextel,
said, "American Appraisal's analysis exposes the arbitrariness of Kane
Reece's spectrum valuations.  They are completely unreliable and do not
support Verizon's tired assertion that Nextel will unfairly benefit
under the Consensus Plan. The Consensus Plan will treat all stakeholders
fairly and solve the 800 MHz public safety interference problem."

About American Appraisal Associates

American Appraisal Associates is the largest independent valuation
consulting firm in the world with global capabilities and an
international presence. Established in 1896, American Appraisal has more
than 50 offices on four continents with a staff of over 800 people. Its
clients represent a wide cross-section of industries and institutions,
from members of the Fortune 500 and the Fortune Global 500, to emerging
companies that are defining new business opportunities. American
Appraisal has an unparalleled record of successfully defending its
valuations in the courts and in front of regulatory agencies around the
globe, including Revenue Canada, the U.S. Internal Revenue Service, the
Security and Exchange Commission, the European Economic Union and
China's NABSOP.

http://biz.yahoo.com/bw/040506/65809_1.html

--
    "NEXTEL-1 IT'S NOT JUST NEXTEL"
  Note The New address
Subscribe to Nextel-1: http://www.groups.yahoo.com/subscribe/NEXTEL-1

  "NEXTEL2 FOR iDEN SOFTWARE DEVELOPERS"
Subscribe to Nextel2: http://www.groups.yahoo.com/subscribe/NEXTEL2

  "WIRELESS FORUM HOMELAND SECURITY GROUP"
     The Complete Resource for Wireless Homeland Security.
Subscribe to WFHSG:  http://www.groups.yahoo.com/subscribe/WFHSG

------------------------ Yahoo! Groups Sponsor ---------------------~-->
Yahoo! Domains - Claim yours for only $14.70
http://us.click.yahoo.com/Z1wmxD/DREIAA/yQLSAA/61FxlB/TM
---------------------------------------------------------------------~->

-- 
    "NEXTEL-1 IT'S NOT JUST NEXTEL"
  Note The New address 
Subscribe to Nextel-1: http://www.groups.yahoo.com/subscribe/NEXTEL-1

  "NEXTEL2 FOR iDEN SOFTWARE DEVELOPERS"
Subscribe to Nextel2: http://www.groups.yahoo.com/subscribe/NEXTEL2

  "WIRELESS FORUM HOMELAND SECURITY GROUP"
     The Complete Resource for Wireless Homeland Security.
Subscribe to WFHSG:  http://www.groups.yahoo.com/subscribe/WFHSG

Yahoo! Groups Links

<*> To visit your group on the web, go to:
     http://groups.yahoo.com/group/NEXTEL-1/

<*> To unsubscribe from this group, send an email to:
     [email-masked]

<*> Your use of Yahoo! Groups is subject to:
     http://docs.yahoo.com/info/terms/