Verizon-backed company in $3bn wireless licence bid (Financial Times)
By Stephanie Kirchgaessner in New York
Published: August 4 2001 01:24GMT | Last Updated: August 4 2001 15:16GMT
A Florida company backed by Verizon Wireless, the largest US wireless carrier, made a $3bn bid for portions of NextWave Communications' wireless licences, it emerged on Friday.
The move by Valley Communications is likely to further complicate the messy bidding war which has erupted over the licences between the Federal Communications Commission and the telecom sector.
The conflict began when NextWave, a telecoms start-up, filed for bankruptcy and was unable to pay for wireless licences it had won in 1997 for $4.7bn in an FCC auction.
The US telecom regulator seized NextWave's licences and re-auctioned the wireless rights in January this year, raising $17bn - Verizon Wireless was the highest bidder in that re-auction, making an $8bn bid for 130 licences.
But a wrench was thrown into Verizon Wireless and the FCC's plans in June, when NextWave won an appeals court ruling which found that the FCC had acted improperly when it re-auctioned the company's licences.
While industry insiders think it is likely that the FCC will ask the US Supreme Court to review the lower court's decision, barring any other solutions, the licences remain for now in the hands of NextWave, which despite the bankruptcy filing is still optimistic that it can build its own network with the wireless rights.
Verizon made the $3bn bid through its Florida partner because the original auction in which NextWave won the licences was meant only for smaller telecoms players which could receive financial backing from larger companies - though the re-auction was not limited in the same respect.
With the bidding guidelines now in disarray however, and Verizon, AT&T and others urging the FCC to dispute the appeals decision, Verizon decided it was a safer bet to make the bid through an affiliate it backs, instead of on its own.
"Our preferred settlement would be that NextWave and the government would settle in a way that reconfirms the reauction", said a Verizon spokesman.
Despite the urging on of the FCC to bring the case to the Supreme Court, a drawn-out legal battle in Washington would not be in the best interest of telcos eager to gain access to the licences as quickly as possible.
"Time is of the essence. The bottom line is that the value of those licences decline with the time that goes by that they could be used," the Verizon spokesman added.
Verizon is bidding for 50 licences covering Boston, Los Angeles, New York, Seattle, Pittsburgh, Minneapolis and Indianapolis.
The structure of the bid would entail only a portion of NextWave's licences, leaving enough for NextWave to build their own network or sell-off more licences.
NextWave was unavailable for comment.
news.ft.com
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.. "Time is of the essence. The bottom line is that the value of those licences decline with the time that goes by that they could be used," the Verizon spokesman added.."
<g>
The value of those licenses goes up every time Verizon or Cingular or AWE sign another subscriber... the value of those licenses goes up incrementally... moment by moment... as Verizon's and Cingular's and AWE's capacity becomes further constrained... the value of those licenses goes up every time Verizon and Cingular and AWE consider additional value added features and content and data services... the value of those licenses goes up every time the department of defense opens its spectral maw...
The value of those licenses are inflating faster than consumer prices under the Carter administration.
But how is Verizon trying to influence the (rather simple minded) FCC?
Resolve this matter soon, as the value of your commodity dwindles!... says Verizon to the FCC.
Does Verizon appear to argue for a protracted appeal or Supreme Court review? Hardly..
What would mark a decline in the value of nextWave's spectrum?
Only one thing....
A concrete schedule for additional spectrum to be auctioned in the near future.
And that ain't gonna happen. |
