FCC poised to return NextWave-related deposits-sources
biz.yahoo.com
By Jeremy Pelofsky
WASHINGTON, March 26 (Reuters) - Verizon Wireless and other major mobile telephone carriers
will likely soon receive most of $3.2 billion in down payments they made to the government for
disputed wireless licenses, industry sources familiar with the situation said on Tuesday.
The carriers made the down payments for
licenses the Federal Communications Commission had tried to repossess from
bankrupt NextWave Telecom Inc. (Other OTC:NXLC.PK - news) and resell to
them last year for $15.85 billion.
The FCC tried to repossess the licenses from NextWave because it failed to pay
for them on time, but in June the appeals court ruled taking them back violated
bankruptcy law and ordered the licenses be turned over.
However, the agency had already tried in January 2001 to resell the licenses to
13 carriers, including Verizon (NYSE:VZ - news)(quote from Yahoo! UK & Ireland:
VOD.L), VoiceStream Wireless and partners of AT&T Wireless Services Inc.
(NYSE:AWE - news) and Cingular Wireless (NYSE:BLS - news)(NYSE:SBC -
news).
The Supreme Court agreed earlier this month to review the appeals court
decision but the outcome is not expected for about a year, leaving the carriers
on the hook for the down payments and potentially the full amount they bid for the disputed licenses.
While the licenses and the 2001 sale are in limbo, the carriers have asked the FCC to return their down payments so the funds could be used elsewhere. They argue the funds can be used to expand and improve services and millions of dollars in interest are being lost.
Within the next 10 days or so, the FCC is poised to return about 85 percent of the down payments to the carriers, or about $2.7 billion, according to people familiar with the situation. However, a final vote by the four commissioners has not yet occurred, the sources said.
That would leave about $475 million on deposit with the government, or 3 percent of the total bids, which is equal to the penalty assessed if all the carriers were to withdraw their winning bids, the people said.
The FCC declined to comment.
Verizon Wireless, which has made the biggest down payment of $1.7 billion for 67 licenses it won, was turned down earlier this month by a federal appeals court in its effort to compel the FCC to return the down payment.
The FCC was previously poised to return the funds earlier this year, however that move was halted because of fears in some quarters that it could undermine the effort to get the Supreme Court to review the dispute.
The high court agreed on March 4 to hear the case, setting the stage for oral arguments this fall and a decision expected sometime in 2003. |
