Final Lap In NextWave Case Begins
wirelessweek.com
BY MARK ROCKWELL
MAY 6, 2002
WIRELESS WEEK
2002, REED BUSINESS INFORMATION, A DIVISION OF REED ELSEVIER INC. ALL RIGHTS RESERVED.
WASHINGTON Following weeks of turbulence, the storm over NextWave Telecom Inc.'s spectrum
has calmed down considerably. Still, several critical, albeit less controversial, developments are
occurring.
Today marks the start of the final lap in the race to settle who will end up owning NextWave's
spectrum. The government, led by the FCC, is slated to file its case with the Supreme Court. It has
argued throughout the legal battle that the commission acted properly in reclaiming and re-auctioning
the bankrupt company's spectrum after it stopped making payments on the licenses it won in 1996.
Alaska Native Wireless, one of the re-auction winners, also will file its case today.
Both filings are important because they will reveal what tack the government and re-auction winners
are taking to regain the disputed spectrum, which was returned to NextWave by a federal appeals court
that ruled the FCC violated federal bankruptcy law in taking back the licenses. NextWave's arguments
are due to be filed with the court in June.
NextWave's lawyers will be watching to see if the FCC argues strictly along the lines of whether the
lower court interpreted federal bankruptcy law properly in nullifying the re-auction, or whether it will
pursue jurisdictional issues among district courts. Knowing the government's strategy could give
NextWave leverage in its arguments in June, sources say.
In related news, Verizon Wireless last week said the FCC had returned the bulk of the deposit it paid to
acquire NextWave spectrum. The company says it will use the $1.5 billion returned by the agency to
pay down its debt. Verizon has been seeking the return of it deposit ever since the legal imbroglio over
ownership of the spectrum began months ago. Alaska Native received $472 million back, according to
the FCC.
In returning the bulk of Verizon's deposit the FCC continues to hold on to $200 million in case the
re-auction is ruled valid the agency "was just doing what it said it would," says an FCC spokeswoman,
who declined further comment. The commission announced in late March it would return most of the
deposits paid to the agency by Verizon and other smaller bidders for the contested spectrum.
The refund doesn't completely satisfy Verizon. The payment is a good start, says Verizon Wireless
President and CEO Denny Strigl, but the company still wants to see the re-auction declared null and
void. Verizon bid $8.7 billion for 67 licenses but argues now that the licenses are not worth as much in
the current market.
"This deposit was handed over to the FCC more than a year ago, and its return, along with the
remainder of the deposit that the FCC continues to hold, is long overdue," Strigl says. "The auction is
clearly void, or voidable, and we believe a return of the entire deposit and cancellation of our
obligations are required." |
