Technology News FCC
Mon, 06 Sep 1999, 11:07pm EDT
U.S. FCC Asked to Assure Competition For Radio Spectrum Sought by Nextel
By Lisa Levenson
FCC Asked by Cellular Group to Clarify Procedures (Update1)
(Updates with closing share price.)
Washington, Sept. 3 (Bloomberg) -- The U.S. Federal
Communications was asked by a telecommunications trade group to
clarify how it will assure competition for wireless spectrum that
Nextel Communications Inc. is trying to win.
In a letter to FCC Chairman William Kennard yesterday, the
Cellular Telecommunications Industry Association requested that
the agency ``act immediately to restore confidence in the
integrity of the FCC's licensing procedures.' The group
represents 48 of the 50 largest U.S. wireless companies.
The request was sparked by Nextel's announcement last month
that FCC staffers had agreed to recommend a waiver of rules
prohibiting large companies from buying certain wireless
licenses. The move was seen as clearing the way for Nextel to buy
spectrum owned by bankrupt NextWave Telecom Inc.
The extra spectrum would help Nextel accommodate rapid
growth in customers and minutes of use, and offer new services,
such as high-speed wireless Internet access. Earlier this week, a
federal court granted a request from the FCC to delay a
confirmation hearing on NextWave's bankruptcy plan. The FCC is
NextWave's largest creditor.
``The eligibility flexibility apparently endorsed by the
Commission's staff in the Term Sheet could materially impact many
companies who, like Nextel, have not been able to acquire these
licenses to date,' CTIA President and Chief Executive Thomas
Wheeler wrote.
Hawthorne, New York-based NextWave bid about $4.8 billion
for radio spectrum in a 1996 government auction, although the
company has paid only about $500 million. A bankruptcy judge
reduced the price to just over $1 billion. The FCC is challenging
the price reduction, and backed a proposal by Nextel to buy the
spectrum for at least $2.1 billion.
The FCC declined to comment on the letter.
Shares of Reston, Virginia-based Nextel, which have more
than doubled so far this year, rose 4 11/16 to 60 13/16.
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