Wireless firms resigned on NextWave, seek airwaves
totaltele.com
By Jeremy Pelofsky, Reuters
21 March 2002
U.S. mobile carriers have given up on getting access to disputed NextWave spectrum in the near future
U.S. wireless carriers said this week they were resigned to the fact they will not get access anytime soon to airwaves tied up in a bankruptcy dispute and called on the government to find other airwaves so new services can be deployed and expanded.
A huge swath of airwaves for major metropolitan areas like New York and Los Angeles held by NextWave Telecom , a carrier trying to emerge from bankruptcy, are at the center of a legal dispute expected to last for at least another year.
Established carriers like Verizon Wireless, VoiceStream and others are scrounging for more airwaves to meet rising demand -- about 45 percent of Americans already own a mobile phone -- and to roll out wireless high-speed Internet services that include streaming video and interactive games.
"We need a meaningful amount of clear spectrum in order to be able to offer
third-generation services and unless the government makes more spectrum
available, America is falling behind," John Stanton, chief executive officer of
VoiceStream Wireless, a unit of Deutsche Telekom, said in an interview.
"We can't wait to figure out whether or not we've got that (NextWave)
spectrum to take steps to improve quality of service or continue to increase
capacity to service our customers," he said.
The government is engaged in a wide search for airwaves it uses that could be switched to commercial use, however Federal Communications Commission Chairman Michael Powell likened the search to the infantryman's crawl he knows from his days in the military.
"It's just messy, there's nothing clean about this," he said at the Cellular Telecommunications and Internet Association annual conference this week.
Tom Wheeler, CTIA chief executive officer and the industry's top lobbyist, retorted that the government needs to quicken the pace to a "blitzkrieg" effort.
The U.S. Supreme Court has agreed to weigh in on whether the FCC can legally repossess licenses for mobile telephone service from NextWave because the carrier failed to pay on time, a process that will take about a year.
The FCC resold the licenses in an auction last year to other carriers for $15.85 billion, taking about $3.2 billion in deposits, but the sale was thrown into limbo in June when an appeals court ruled the FCC could not repossess the licenses from NextWave, which had already filed for bankruptcy, simply because of nonpayment.
Because of the protracted legal wrangling, the carriers want their money back and want the government to concentrate on finding other spectrum.
"I don't think we have any choice" but to wait it out, said Harvey White, chairman and chief executive of Leap Wireless Inc., one bidder in the NextWave auction. "I don't think there's anything we can do to influence that."
Cingular Wireless Chief Executive Officer Stephen Carter said the licenses its partner, Salmon PCS, would acquire if the legal wrangling came to an end would boost Cingular's capacity as service expands.
The NextWave spectrum "was always a bonus to us," he told Reuters. Cingular, the No. 2 U.S. carrier, is a joint venture of BellSouth Corp. and SBC Communications Inc.
Verizon Wireless, the biggest U.S. wireless carrier, has said it considers its participation in the NextWave auction void. The carrier bid $8.5 billion for 67 disputed licenses.
Verizon Wireless, a joint venture of Verizon Communications and Vodafone Group Plc, has tried different ways to either acquire the licenses or recover the $1.71 billion down payment it deposited with the FCC for the licenses. The agency has not acted and a court so far has refused to compel the FCC to return the funds.
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