Auction winners want FCC to pay NextWave up to $5B to go away

Auction winners want FCC to pay NextWave up to $5B to go away
By Patrick Mannion, EE Times
July 27, 2001 (1:20 p.m. EST)
URL: http://www.eetimes.com/story/OEG20010725S0112

MANHASSET, N.Y. — In a strong show of solidarity among competitors, five of the largest winners of third-generation (3G) licenses from the re-auctions by the Federal Communications Commission (FCC) of PCS spectrum early this year petitioned the FCC to bring the NextWave litigation to a close by paying the company more than $4 billion to go away.

Comprising Alaska Native Wireless (partly owned by AT&T), Dobson Communications Corp., Verizon Wireless, VoiceStream Wireless and Salmon PCS (partly owned by Cingular), the petitioning group bid a combined total of over $15 billion for the licenses back in January. Since then, however, that spectrum was found to rightfully belong to NextWave (Hawthorne, N.Y.), which is now ostensibly in the process of continuing its rollout plans, despite bankruptcy proceedings.

Taking the position that further litigation serves no one's interest, the petitioning group now wants the FCC to take the money garnered f rom the auction back in January and use it to pay NextWave a sum starting between $4 and $5 billion. The remainder of the $15.8 billion would go to the Treasury Department.

In return, says the petitioning group, NextWave would have to forfeit its claim to the PCS licenses, and the FCC would return those licenses to the winners from its Auction No. 35.

This, the group argues, would cover the $4.7 billion NextWave bid for the licenses and avoid the cost and delay of any further litigation. In addition, it would allow the better-positioned Auction No. 35 winners to re-commence their planned rollout — "for the benefit of the consumer."

According to a letter submitted to the FCC Wednesday (July 25), the group collectively stated, "We are at a fork in the road. The government can continue to litigate this case, possibly for several years more. Or, you can negotiate a resolution now. Spectrum is a scarce resource that is a key component of the nation's economic growth; it is important that spectru m go to those entities that can best use it to serve the public's needs." The petition claims it is the FCC's "fiscal responsibility" to make this happen.

While the FCC refrained from comment Wednesday, saying that "We are taking the petition into consideration," NextWave was somewhat more vocal. In a formal reaction to the petition, the company declared, "The same carriers who urged the agency to stop NextWave's reorganization are again threatening to tie up NextWave's licenses with further litigation unless their demands are met. Today's filing further reveals that the petition several of them filed last week at the FCC is nothing more than a baseless and unfounded effort to stop a competitor from entering the marketplace."

In what some analysts suspect was more of a move designed to raise its potential buyout price by the FCC, NextWave earlier this month inked a deal with Lucent that would get the company moving on its 3G CDMA-based buildout.

Nonetheless, the company maintains that, "Consumers are waiting for this spectrum to be put into use to deliver them the next generation of wireless services. It's time to stop litigating and start building out. Competition should be carried out in the marketplace, not in the courts or through inappropriate use of the regulatory process."