Wireless firms split on next move in NextWave case
6/22/01 2:58 PM
Source: Reuters
investor.cnet.com
WASHINGTON, June 22 (Reuters) - Major bidders for the wireless spectrum claimed by bankrupt NextWave Telecom Inc. were split on what to do now that an appeals court on Friday said communications regulators were not entitled to repossess the licenses.
The U.S. Court of Appeals for the District of Columbia on Friday ruled the Federal Communications Commission (FCC) violated bankruptcy laws when it took back 90 wireless licenses from NextWave because the company failed to make payments on time.
Verizon Wireless, the biggest winner in the
January re-auction of the licenses, urged the
agency to convene settlement talks so the
coveted airwaves could be put to use
quickly. Meanwhile, the second biggest
winner urged the FCC to appeal to the
Supreme Court.
"Having some discussions between all
affected parties certainly would be in order.
The more talking the better," said Jeffrey
Nelson, a spokesman for Verizon Wireless,
the nation's biggest mobile phone carrier.
So far, the FCC has yet to formally issue
any of the contested licenses, which were
split into 216 smaller parcels when they
went to auction a second time. The FCC
said it would review the court's decision and
declined further comment.
Verizon Wireless bid $8.78 billion for 113
licenses, winning two licenses each in key
markets such as New York and Boston. The
company is a joint venture between local
telephone company Verizon
Communications and Britain's Vodafone
Group Plc.
"How we get there (getting the spectrum out there for use) at this point an open question. The starting point has to be discussions with the FCC and NextWave and high bidders," Nelson said.
Meanwhile Alaska Native Wireless, which has ties to AT&T Wireless, the nation's third-largest wireless operator, urged the FCC to appeal the decision to the U.S. Supreme Court which has previously sided with the agency in other NextWave challenges.
"We anticipate and support the Federal Communications Commission's appeal of this decision and look forward to final award" of the licenses, said Conrad Bagne of Arctic Slope Regional Corp., managing member of Alaska Native Wireless.
"American consumers are harmed by the continued uncertainty of these licenses. The decision again delays the deployment of spectrum, which would provide more competition in other markets and enable carriers to provide more complete geographic network coverage for their customers," he said.
The one area of common agreement among analysts who track the wireless industry is that the appeals court ruling pushes back the roll-out of new and improved services.
The ruling "throws a huge monkey wrench in the plans of the carriers," said WIT SoundView analyst Tim O'Neil.
Leap Wireless Inc., which won 22 licenses, declined to comment and said it would look "to the FCC to see what they have to say."
"A negotiated settlement is more likely. There's the possibility of a cash settlement, or getting future bidding credits, or getting all of their original spectrum back," Kevin Roe, a wireless analyst with ABN Amro.
If NextWave gets its spectrum back, it would likely resell the licenses, rather than building out a costly network, Roe believes. "The companies who won the licenses in auction could end up getting that same spectrum for less if it's resold because wireless valuations have fallen since the auction."
Shares of wireless stocks have fallen sharply in recent months amid the slump in technology-related shares, concerns about weak subscriber growth in the slowing economy, and worries about the high-cost of upgrading networks to handle new-generation services.
Copyright 2001, Reuters News Service |
