WSJ article on NextWave settlement.
April 20, 2004 5:06 p.m.
NextWave Reaches Settlement With FCC Over Spectrum
Associated Press
WASHINGTON -- Federal regulators reached a settlement Tuesday with bankrupt NextWave Telecom Inc., ending years of legal wrangling over lucrative wireless licenses.
The deal announced by the Federal Communications Commission frees a large chunk of spectrum in dozens of crowded markets, including Chicago, Los Angeles, New York and Seattle. The agreement is expected to result in clearer cellphone calls and more advanced wireless options, such as Internet-connected mobile phones, in those areas.
"Making additional next-generation wireless services available is good for the economy and good for broadband deployment," FCC Chairman Michael Powell said in a prepared statement.
If the deal is approved by a U.S. bankruptcy court in New York, the FCC gets about 90% of the licenses back for resale. NextWave, of Greenwich, Conn., would keep the remaining 10%, most of them in the profitable Northeast region.
Industry groups said the release of additional spectrum on the market is good for consumers.
"Making more spectrum available is like adding another lane to the freeway," said Travis Larson, spokesman for the Cellular Telecommunications and Internet Association. "Wider roads make room for more cars and less traffic, while additional spectrum means more wireless calls, fewer busy signals and room for high speed data services."
One of the negotiators for NextWave, Doug Teitelbaum, said the deal benefits everyone.
"For the government, it puts important spectrum back in a position to be used. For the White House, it's an important mechanism for fueling the economy, with job growth and so on. For NextWave, it ends what has been a protracted litigation," said Mr. Teitelbaum, the managing principal at Bay Harbour Management, an investor in NextWave.
The agreement would clear a major obstacle to NextWave's emergence from bankruptcy.
NextWave won the spectrum at a 1996 auction with a $4.7 billion bid. But after the company failed to keep up with payments and filed for bankruptcy in 1998, the FCC resold the licenses to Verizon Wireless and other companies for about $16 billion at a second auction.
That sale was nullified in 2001 by a federal appeals court, which said the FCC couldn't repossess the licenses while NextWave was under bankruptcy protection. The FCC appealed to the Supreme Court, which sided with NextWave last year.
Copyright © 2004 Associated Press.
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