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Technology Stocks : Nextwave Telecom Inc. -- Ignore unavailable to you. Want to Upgrade?

To: gdichaz who wrote (559)	11/2/2001 11:02:51 AM
From: Jon Koplik	Read Replies (1) \| Respond to of 1088

WSJ article on final (?) NextWave settlement stuff. November 2, 2001 NextWave Will Sell Its Wireless Licenses To Telecoms as Part of Government Deal By YOCHI J. DREAZEN Staff Reporter of THE WALL STREET JOURNAL WASHINGTON -- After weeks of intense negotiations, NextWave Telecom Inc. has finalized an agreement to sell highly coveted wireless-communications licenses to several large cellular companies, according to people familiar with the situation. The $16 billion deal, which will resolve a bitter legal and political fight that has raged for more than five years, could be announced as early as Friday, these people said. All of the major players in the talks -- the companies, NextWave, the Federal Communications Commission and top officials from the Justice Department and the White House Office of Management and Budget -- have signed off on the deal after settling final questions on timing and procedures for the license transfers and payments, these people said. Under the terms of the agreement, cellular-phone companies such as Verizon Wireless, a unit of Verizon Communications Inc. and Vodafone Group PLC, will pay NextWave, now operating under bankruptcy-court protection, about $11 billion and pay the government about $5 billion. The identities of other buyers weren't known. NextWave would relinquish about half of that money in taxes, so the deal would effectively leave the government with about $11 billion. NextWave would end up with about $5 billion. NextWave won't be the only one to benefit. Cellular phone companies that bid a collective $15.8 billion for the spectrum earlier this year will get airwaves in a number of major markets, enabling them to strengthen their networks and roll out advanced "third generation" services. The government will rid itself of an enormous public-relations headache and add billions of much-needed dollars to its coffers, which have been drained by the slowing economy and new spending related to the Sept. 11 attacks. Senior FCC officials want to see the spectrum put to use. Representatives from NextWave, the wireless companies and the government all declined to comment Thursday. A deal still must be approved by a New York bankruptcy-court judge overseeing the reorganization plan. The agreement will settle a controversy that has dogged the wireless industry since 1996, when NextWave submitted $4.7 billion in winning bids for the licenses at an FCC auction. Two years later, the company sought Chapter 11 bankruptcy protection after paying just $500 million of its debt. In response, the FCC reclaimed the licenses and auctioned them off again, raising nearly $16 billion. But the second auction was annulled earlier this year when a federal appeals court ruled the FCC erred in repossessing the licenses, and ordered them returned to NextWave. The FCC announced plans to appeal the decision to the Supreme Court, but had no choice but to release the spectrum to NextWave, which announced plans to build a national high-speed wireless data network. Even as it publicly insisted that it had no desire for a deal, the company began listening to settlement offers from the major carriers, which were desperate to gain control of the spectrum. Initially, NextWave insisted that it retain some of its spectrum so it still had the option of trying to build itself into a viable wireless company, according to people familiar with the talks. But the FCC and the carriers insisted that NextWave relinquish all of its licenses as a way of protecting the transfer from legal challenge. The companies insisted on legislation insulating the deal from legal challenge from other carriers, which are likely to argue that it was improper for the FCC to exclude them. Write to Yochi J. Dreazen at yochi.dreazen@wsj.com Copyright © 2001 Dow Jones & Company, Inc. All Rights Reserved.