NextWave urges court to reject appeal on licenses
biz.yahoo.com
By Jeremy Pelofsky
WASHINGTON, Feb 1 (Reuters) - Bankrupt NextWave Telecom Inc. on Friday urged the U.S. Supreme Court reject an appeal in which federal regulators are trying to wrestle away from the company valuable wireless licenses that have been fought over for years, a battle that could last for about another 12 months.
NextWave bought the licenses in 1996 for about $4.7 billion but only paid $500
million before entering bankruptcy protection in 1998. The Federal
Communications Commission (FCC) tried to take the licenses back and reauction
them last year after the company failed to pay on time.
The U.S. Court of Appeals for the District of Columbia ruled last June that the
FCC violated bankruptcy law when it repossessed the licenses. The agency
petitioned the Supreme Court to hear the case arguing bankruptcy law should
not supersede statutes designed to allocate airwaves.
On Friday, NextWave said the justices should not hear the case because the
appeals court ruling properly interpreted bankruptcy law, the decision did not
conflict with other decisions and the FCC will not likely face the situation again
since it no longer allows installment payments.
The court applied bankruptcy law ``in precisely the manner for which it was
intended, allowing NextWave an opportunity to rehabilitate itself and submit a
plan of reorganization that would both pay creditors in full and complete the commercialization of NextWave's licenses,'' NextWave said in its brief.
An FCC spokesman declined to comment.
The company has secured $2.5 billion in debt financing from UBS Warburg and had been lining up another $3 billion through the sale of preferred stock. Qualcomm Inc. (NasdaqNM:QCOM - news) had agreed to make a $300 million investment however recently said it may cancel that because of the uncertainty of NextWave's future.
Hawthorne, N.Y.-based NextWave also noted that the FCC was willing to settle the litigation allowing the appeals court ruling to stand which ``belies petitioners' predictions about the allegedly dramatic impact of the decision.''
The FCC tried to broker a settlement to preserve the 2001 sale of the NextWave licenses to carriers like Verizon Wireless (quote from Yahoo! UK & Ireland: VOD.L)(NYSE:VZ - news) and VoiceStream Wireless , but that fell apart when Congress recessed last year without passing the necessary legislation to authorize the deal.
The FCC will have an opportunity to file a reply brief to the high court but a decision by the Supreme Court on whether the justices will hear the case is likely weeks away. If it did hear the case, oral arguments could take place in the fall and a decision would likely come in late 2002 or early 2003.
NextWave has said it plans to become a wholesale provider of airwaves to content providers and other carriers. The company said in the court brief that it has deployed operational wireless facilities in more than 50 markets.
``NextWave intends to deploy operational systems in its remaining markets within the first half of this year, and plans to offer commercial services within the same time frame,'' the company said.
Shares of NextWave, which trade on the Pink Sheets, were down 60 cents to $6.70. |
